Benefits of an Registered Education Savings Plan (RESP)

Here is the 3rd tip in the series of Seven Tax Tips applying to your 2013-14 returns. I hope this is helpful information in deciding how to allocate  your funds.

TIP #3 A parent or grandparent can make deposits to a Registered Education Savings Plan; RESP. This type of ¬†contribution isn’t deductible, but the investment income grows tax-free. At some point, when the money is withdrawn, it is then taxed in the name of the student. The student may pay little or no tax, depending on their own tax bracket. Another feature is the if you contribute up to $5,000 in one year, the federal government will pay a 20 per cent matching grant into your RESP. You may also be able to add more to the plan if you have unused contribution room from previous years. This can be explained in more detail by John McCormack CPA, CGA CFP, your accountant.

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