Little known tax break if you have kids
Put all the child tax credit money you get from the government in a separate account, called "Mothers name, in trust for the children". Obviously, use your own name. This creates an informal trust. Set up the bank account and tell the govt. to put all those funds there. Make sure that no other money goes there just child tax credits. We put in the Family Allowance cheques.
Now, here is the interesting thing. The interest that money earns is taxed in the kids hands, not the parents.
This is not well known.
You have to get a SIN number for each kid, and make out a tax return each year with his or her share of the interest earned from the T5. Put in a note giving details of the account so Ottawa can make sense of it. Obviously the kid won't need to actually pay any tax because he won't be earning enough so the interest never gets taxed and essentially grows tax free even though it is after tax money.
Then, on the mother's tax return, include a note explaining what you have done so Ottawa knows not to include the interest income on that account.
We have done this for 18 years for 3 kids and the account has grown to over $20k so there is enough interest generated to incur some taxes if the mom had to declare it.
In some ways this has been better than the RESP, because the kids can use the money for whatever they want. Also, all the money has already been taxed, where in a RESP, the interest is taxed in the kids hands when it is withdrawn, and many kids will already have jobs at that age so they may end up paying taxes on the money they withdraw. One reason that you should use up the RESP money for the first few years of college when the kids are earning less.
We set up a little mutual fund and transferred the money every year, and it grew quite nicely and now each kid has a bit of capital for his own use and it is all after tax money, even though no taxes have ever been paid on it.
You do have to be careful and not put in any extra money, because the interest on gifts is taxed in the hands of the giver. We just set up the account and forgot about it. The govt. put in the money every month and every year or so we would move it to someplace a bit more profitable.
One more thing, the computer tax programs usually allow an unlimited number of returns for people earning a low income so making out the kids returns won't affect the number of returns you can do. You have to mail them in though, including the mother's, so you can include the notes explaining things. No internet filing. I tried net filing once and got disallowed, so I had to re-submit including all the notes to get it changed.