Can I invest in my child's training as a tax deduction and then get a nice refund when she becomes a successful pro?
That's an easy question.
The answer is no.
Eugenie Bouchard's father thought he could create a partnership where the money he spent on training his daughter could be used to generate a tax loss. Unfortunately tax law in Canada doesn't allow you to enter into a contract with your 9-year-old daughter. To quote the article,
"The investors in the partnership had intended to make their contributions in exchange for 10 per cent of Ms. Bouchard’s future tennis earnings, up to the amount they contributed, plus a 10-per-cent rate of return per year. But as the court ruling noted, Ms. Bouchard was never a party to the partnership despite being the source of its income – as a nine-year-old, she could not reasonably have consented to signing away part of her future earnings. Instead, Tennis Mania’s business model relied on her goodwill to honour its terms. In the eyes of the law, that wasn’t enough."
It's an interesting idea, but not something that actually works.
A 5 day tax holiday
Thanks to this month's Heartbleed bug shutdown, Canadians get an extra 5 days to file their taxes - the revised deadline for 2014 is May 5 as the CRA announced.
Despite what most people think, not all accountants do the same kind of work - I'm not a full-time tax accountant, though this was another season where I spent some quality time at the free CA tax clinics. The majority of the clinics run in March so if you qualify for them, plan ahead next year to take advantage of a really useful service. Much better than spending $60 when things are tight when that could go towards food or shelter!
Taxes shouldn't be so complicated
Two general principles you should keep in mind:Society works well if there are rules in place, there's a cost to this.People respond to incentives.
To run a society, you need a basic level of taxation to enforce the Rule of Law.
In addition to your basic Rule of Law, there are activities that your community will decide are favourable or unfavourable. Polluting the air, we can generally agree, is a Bad Thing. Educating the children, by the same token, is a good thing.
Charge a tax on activities that cause pollution, apply that to education and enforcement of law. Add on a basic level of taxation to close the gap between what your pollution tax collects and what you need to break even.
Reality is of course several orders of magnitude more complex, but if you get into any more detail, you're making it too complicated.
Get things done properly, and move on. Let the "experts" deal with the details.
If you're wasting money on frills like entitltements for politicans, though, you're Doing it Wrong.
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