Janet Brown is 45 and divorced. She has two children who live with her and are dependent on her. Stephen is 12. Sarah is 17 and has been certified as eligible for the disability credit.
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Janet’s financial information for 2019 and 2020 includes the following:
Salary and taxable benefits $105,000 $100,000
Car expenses deducted in computing employment income 5,000 5,000
Child support received 36,000 36,000
Spousal support received 12,000 12,000
Mortgage payments made by Janet’s ex-husband 10,000 10,000
Net rental income/(loss) 5,000 (2,000)
The child support, spousal support and mortgage payments are pursuant to the written agreement between Janet and her ex-husband. For the mortgage payments, the agreement referenced subsections 56.1(2) and 60.1(2) of the Income Tax Act.
Janet paid the following child care expenses in 2020 so she could go to work:
Day care centre for after school program for Stephen $5,000
Overnight summer camp for Stephen (4 weeks) 4,000
Overnight special summer camp for Sarah (4 weeks) 8,000
Payments to her cousin Julia (age 35) to look after Stephen
and Sarah during the rest of the summer 3,000
Janet has $2,000 of unused RRSP deduction room at the end of 2019 and he 2019 tax return was assessed as filed. Her employer sponsors a registered pension plan for its employees. Janet’s T4s show a pension adjustment of $5,000 for 2020 and $4,500 for 2019.
Janet would like to know the following:
- How much can she deduct for child care expenses on her 2020 tax return? Show all calculations.
- What is the maximum amount that she can deduct for RRSP contributions on her 2020 tax return? Show all calculations. What is the deadline for her to make the contributions for them to be deductible on her 2020 tax return?