How much money does the Disability Tax Credit really mean to you and your family?
The answer is, up to $200,000!
Example: In January of 2012, a 40 year old client is approved for the DTC for the last 10 years, and receives a $25,000 lump sum refund. The clients DTC approval includes an annual $2,500 refund for each future year. The client continues to work until the age of 60, and receives a $2,500 refund at the end of each tax year for 20 years, thereby collecting a total of $50,000 for those years. In total the client received $25,000 in a lump sum refund and $50,000 in total annual refunds, equalling $75,000 in total Disability Tax Credit refunds.
Option A
(Cash Face Value) Total Value of Refund: $75,000.
Client does not deposit refund amounts into any savings plan. No interest or other value added to the funds.
Option B
(Savings Account) Total Value of Refund: $115,000*
Client deposits $25,000 lump sum into a savings account as soon as it is received, and continues to deposit each annual $2,500 refund as they are paid. Savings interest is added to the funds allowing it to grow to this figure when the client is aged 60.
(*Estimate based on $75,000 invested at 3% annual interest.)
Option C
(Mutal Funds/Investment Account) Total Value of Refund: $175,000*
Client deposits $25,000 lump sum into a Mutual Fund and/or Investment Account as soon as it is received, and continues to deposit each annual $2,500 refund as they are paid. Mutual Fund / Investment interest is added to the funds allowing it to grow to this figure when the client is aged 60.
(*Estimate based on $75,000 invested at 6% annual interest.)
Option D
i) (Registered Disability Savings Plan) Total Value of Refund: $200,000*
Client deposits $25,000 lump sum into a Registered Disability Savings Plan (RDSP) as soon as it is received, and continues to deposit each annual $2,500 refund as they are paid. RDSP annual contribution of $3,000 and interest is added to the funds allowing it to grow to this figure when the client is aged 60.
(*Estimate based on RDSP additional annual contributions of $3,000, for lower income claimants.)
ii) (Registered Disability Savings Plan) Total Value of Refund: $150,000*
Client deposits $25,000 lump sum into a Registered Disability Savings Plan (RDSP) as soon as it is received, and continues to deposit each annual $2,500 refund as they are paid. RDSP annual contribution of $1,000 and interest is added to the funds allowing it to grow to this figure when the client is aged 60.
(*Estimate based on RDSP additional annual contributions of $1,000, for higher income claimants.)
With This Much Money at Risk, It Is Important To Get Proper Help
The Disability Tax Credit is a substantial financial health benefit that matters! When considering the above examples, with the potential lump sum payments of $25,000, and the ongoing annual payments of $2,500, equalling $75,000 in cash value, one realizes just how important the DTC is.
BMD Services recognizes that the DTC is extremely important to individuals and that it can represent a huge sum of money for them, often resulting in a change in the quality of their lives for the better. BMD also recognizes that people with health conditions are often very weary of having to struggle for benefits that they are due, particularly when their condition is taxing to them. Our goal is to allow our clients with health conditions to focus on dealing with their condition, while BMD focuses on getting them their due benefits. After all, health is the most important thing.