There has been some confusion in the wake of the first wave of Universal Child Care Benefit payments.
The senior financial adviser for Maisey Financial says instead of a lump sum refund at the end of the year, parents will get monthly payouts.
John Maisey says this will affect your end of year tax return.
“The part that they have not publicized very well is the new money coming out to you is taxable so it’s going to have to be declared as income on your tax return for 2015,” says Maisey.
Maisey says his concern is people spending the money without knowing it is taxable at the end of the year and possibly ending up owing money to the government.
“On the low end you could owe them 300 or 400 dollars, to the high end with the new tax scheme in New Brunswick you could owe 55% of what you’ve received, and that could come as a surprise to a lot of folks,” says Maisey.
Maisey says some families might prefer to have the cash in hand each month rather than all at once at the end of the year.
“Now there are some folks who have gotten accustomed to the lump sums at the end of the year and rely on that to pay property tax bills or catch up on Christmas credit cards and that type of thing,” says Maisey.
Personally, he says tax refunds are just your money coming back to you so he’d prefer to get it in little pieces every month as opposed to once at the end of the year however, that’s just his personal preference.
He says as with anything to do with money, proper discipline and behaviours will ensure you have enough money at the end of the tax year and it’s not about how much you make, it’s about what you keep.
