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United States CRA Money: 3 Benefits to Claim in 2024
Written by Amy Legate-Wolfe at The Motley Fool Canada
As the year draws to a close, it’s a prime opportunity for Canadians to take full advantage of the benefits offered by the Canada Revenue Agency (CRA). Programs like the Home Buyers’ Plan (HBP), Canada Dental Benefit (CDB), and Registered Education Savings Plan (RESP) are designed to provide financial support and incentives. By acting before December 31, you can maximize these benefits and set the stage for a more prosperous financial future.
The Home Buyers’ Plan (HBP) allows first-time homebuyers to withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSP) to purchase or build a qualifying home. This withdrawal is tax-free, provided it’s repaid within 15 years. Contributing to your RRSP before the year ends not only boosts your retirement savings. It also increases the amount you can withdraw under the HBP when you’re ready to enter the housing market.
The Canadian Dental Care Plan (CDCP) is helping make the cost of dental care more affordable for all eligible Canadian residents. The CDCP replaces the Canada Dental Benefit (CDB), which offered financial assistance to cover dental care expenses for children under 12. The CDCP will reimburse all or a portion of the cost of your treatment, depending on adjusted family net income. Ensuring you apply for the CDCP before the deadline ensures your eligible family members receive necessary dental care without straining your budget.
The Registered Education Savings Plan (RESP) is a powerful tool for saving for your child’s post-secondary education. The government matches 20% of your annual contributions through the Canada Education Savings Grant (CESG), up to a maximum of $500 per year and $7,000 in a lifetime. By contributing before December 31, you secure this grant for the current year, effectively boosting your child’s education fund.
Investing the funds wisely can significantly enhance their growth. One prudent option is the iShares MSCI USA Quality Factor Index ETF (TSX:XQLT). This exchange-traded fund focuses on United States companies exhibiting strong quality characteristics, such as high return on equity and stable earnings growth. As of November 22, 2024, XQLT has delivered a year-to-date return of 31.6% and a one-year return of 33%.
The exchange-traded fund’s (ETF) diversified portfolio includes leading companies across various sectors, providing a balanced approach to investing. Its expense ratio is competitive, ensuring that more of your investment goes toward growth rather than fees. Furthermore, XQLT offers a modest dividend yield, contributing to the overall return on investment.
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Looking ahead, the outlook for XQLT remains positive. The focus on quality companies positions the ETF to perform well even in volatile markets, as these firms typically exhibit resilience during economic downturns. While past performance doesn’t guarantee future results, the ETF’s strategy of targeting high-quality companies provides a level of confidence for investors seeking stable growth.
By leveraging CRA benefits like the HBP, CDB, and RESP before the year ends, you not only take advantage of immediate financial incentives. You also set the foundation for long-term financial health. Investing,, especially in reliable ETFs like XQLT, can amplify your savings and help you achieve your financial goals more efficiently.
Don’t let these opportunities pass by. Review your eligibility, make the necessary contributions, and consider strategic investments to make the most of the benefits available to you. Your future self will thank you for the proactive steps you take today.
The post CRA Money: 3 Benefits to Claim in 2024 appeared first on The Motley Fool Canada.
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Fool contributor Amy Legate-Wolfe has positions in the iShares MSCI USA Quality Factor Index ETF. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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