Filing Taxes as Common Law one year, Filing Separately the next?

[JackalDark]

Hello,

This year, my girlfriend and I filed our taxes together as common law.

This proved to be a mistake as she didn't qualify for the Low income GST credit now that our Family Net Income was too high.

CRA also charged us extra fees just for being Common Law..

Anyway,

My question is, does anyone know if we can file our Taxes separately next year or are we screwed?

Thanks,

[iluvmikeharris]

Every individual has to file their own return, there's no such thing as a "couple's return". The question is whether you indicate on your individual that you are "single" or "common law", which could impact your tax credits and benefits, and you don't get to choose. You're either one or the other.

[Donomight25]

I think the OP is asking if he and the wifey can file as single, as opposed to common-law, even though hes still with her.

Personally? Do it. You both make more $$ at the end of the day and the gvmt doesn't know, and can't prove it. All they ask for IF you get audited is a notarized statement saying you too broke up on a certain date.

[JackalDark]

That's what I'm saying, we indicated Common law..

Are we then forced to indicate it in our next Tax Return or can we go back to "Single" ?

[JackalDark]

I think the OP is asking if he and the wifey can file as single, as opposed to common-law, even though hes still with her.

Personally? Do it. You both make more $$ at the end of the day and the gvmt doesn't know, and can't prove it. All they ask for IF you get audited is a notarized statement saying you too broke up on a certain date.

Spot on,

Then if we do get audited, what would we have to do?

We won't be able to get a notarized statement if we aren't broken up right?

Also, if we do, won't that screw us over if we don't break up lol?

[ghostryder]

This proved to be a mistake as she didn't qualify for the Low income GST credit now that our Family Net Income was too high.

No mistake. You don't qualify so you don't get it. Income tested benefits are just that. Income tested. They are meant for low income people.

CRA also charged us extra fees just for being Common Law..

There are no "extra fees" for being common law.

My question is, does anyone know if we can file our Taxes separately next year or are we screwed?


You could try claiming single next year. But this is a very common cheat that CRA goes after with considerable vigour for obvious reasons. Few taxpayers appreciate people cheating these programs to receive benefits they are not entitled to.


I think the OP is asking if he and the wifey can file as single, as opposed to common-law, even though hes still with her.

Personally? Do it. You both make more $$ at the end of the day and the gvmt doesn't know, and can't prove it. All they ask for IF you get audited is a notarized statement saying you too broke up on a certain date.

So you don't mind paying higher taxes to pay for scumbag cheaters like this? I have no qualms about ratting out anyone I know who pulls this stunt.

CRA doesn't have to prove that you are common-law. If they have reasonable evidence that you are they will simply re-assess you as if you are. You would have to then file an objection to the re-assessment and ultimately you could (if you really want to take it that far) have to prove to a judge that the CRA assessment is incorrect.

[Krox]

I think the OP is asking if he and the wifey can file as single, as opposed to common-law, even though hes still with her.

Personally? Do it. You both make more $$ at the end of the day and the gvmt doesn't know, and can't prove it. All they ask for IF you get audited is a notarized statement saying you too broke up on a certain date.

The problem is the CRA doesn't prove anything, they make a decision and then ask YOU to prove otherwise. If the CRA decides, you are common-law then it will be up to you to say otherwise.

[JackalDark]

No mistake. You don't qualify so you don't get it. Income tested benefits are just that. Income tested. They are meant for low income people.

Well she is low income, she would qualify for it.

I don't, that's fine, I didn't even get that Gas Tax credit that other people who make more than me got.. Couldn't figure that one out...



There are no "extra fees" for being common law.


Haha tell that to the 25 Dollar fee letter I got that states because I filed as common law..



You could try claiming single next year. But this is a very common cheat that CRA goes after with considerable vigour for obvious reasons. Few taxpayers appreciate people cheating these programs to receive benefits they are not entitled to.

I have no illusions about how crooked they are.. they do enjoy going after the little guys..


So you don't mind paying higher taxes to pay for scumbag cheaters like this? I have no qualms about ratting out anyone I know who pulls this stunt.


I do mind, I pay more than enough taxes towards all kinds of BS I don't agree with, most of the money that is taken from me goes directly to Scumbag Cheaters..

Either way this pretty much answers my questions about what risks I would have to take if I was to do it..

And judging by all the BS I've seen from them, it would be no different than crossing someone from the mob..

sigh.

[iluvmikeharris]

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/prsnl-nf/mrtl-eng.html

[Donomight25]

You would have to then file an objection to the re-assessment and ultimately you could (if you really want to take it that far) have to prove to a judge that the CRA assessment is incorrect.

Easily said and done. There are no investigators for tax-fraud. No one will follow you home, tap your phones or try to prove otherwise. You get your day in court. Trust me.

That, and this happens all the time. It's not like your getting a divorce that requires lawyers and forms ect.

It's an amicable split.

[Germack]

Easily said and done. There are no investigators for tax-fraud. No one will follow you home, tap your phones or try to prove otherwise. You get your day in court. Trust me.

That, and this happens all the time. It's not like your getting a divorce that requires lawyers and forms ect.

It's an amicable split.

You are a moron. He is common law therefore he has to file his taxes as common law. Everything else is fraud.

[ghostryder]

Well she is low income, she would qualify for it.

I don't, that's fine, I didn't even get that Gas Tax credit that other people who make more than me got.. Couldn't figure that one out...


But the GSTC is based on "family" income. Since you two are common law, she no longer qualifies.


Haha tell that to the 25 Dollar fee letter I got that states because I filed as common law..

There is no common law fee. You're not telling something. What exactly did the letter say?


I have no illusions about how crooked they are.. they do enjoy going after the little guys..


The law applies to everyone. Their job is to enforce it. That's it.

[brunes]

You are a moron. He is common law therefore he has to file his taxes as common law. Everything else is fraud.

+1. OP post sounds like he thinks he has an option.

If you were common law last year, and you still live together and did not split up, you are still common law. Period. End of story.

Sure you can break the law and do whatever you want, no one here will stop you. But no one here will help you when it triggers an audit either.

[JackalDark]

+1. OP post sounds like he thinks he has an option.

Did you read the rest of the thread? haha doesn't look like I have much of an option at all..

At the time I didn't receive the Gas Tax Credit like everyone else, we hadn't filed common law yet.

[setell]

All that trouble for what a few hundred dollars max a year to risk being audited and have your records sifted through. It isn’t hard to prove you guys are still together if she gets mail sent to the same address, pay stubs, bills, etc. cause usually if folks break up they are most likely NOT going to be living together. Well I know I wouldn’t want to live with my ex if I broke up with him but that could be just me.

[sslinn]

DON'T LIE TO CCRA!

When I broke up with my common law I immediately file both of us as single so she would get her GST refunds again, big mistake and we actually were no longer common law.

You will be investigated. If you do returns as married or common law you will have to go through a separation period first before claiming as single.

My ex and I had to show a 12 months proof that were were indeed now single. Addresses being changed, my home purchase, utility bills from both her home and mine, etc. Just a big hassle. Play by the rules set out or get burned.

Don't get your knuckles smacked by the CCRA, it hurts! :)

[bfoot]

I agree that the OP should continue filing as common law simply because of risk / benefits analysis. The risk of being audited is higher than the benefits of the tax credits.

On the other note, the tax credit the common law spouse of OP is nothing compared to how much our government workers spend on a meal while on "business" trip. I am all for paying less tax if possible, of course, legally.

[JackalDark]

Yeah I have no intention of lying..

I was just trying to find out if I did have any options.

Thanks for all the replies, I didn't expect the thread to become this entertaining with the flaming. hehe

[slowtyper]

What are the advantages of common law filing? I'm filing for the first time as commonlaw next year. I have income but she has none.

[Krox]

What are the advantages of common law filing? I'm filing for the first time as commonlaw next year. I have income but she has none.

The disadvantages are that things like GST-rebates are calculated on both incomes and only 1 person can claim it.

Advantages, if she has no income, you can claim her basic personal exemption. Secondly, you can pool donations and medical expenses. Also, you can transfer tuition (if one person is a student).

Also a warning, if one or more partners is currently getting GST cheques, they will have to pay back any GST-cheques they get after the date they became common-law.

[AllWheelDrift]

What are the advantages of common law filing? I'm filing for the first time as commonlaw next year. I have income but she has none.
In that case I believe her basic tax credits with transfer to you. I.e. You won't pay tax on an addition ~10k in the lowest tax bracket. It doesn't have an effect on your marginal tax rate though. On the other hand, she'll lose the GST tax credit if you don't qualify. (In fact, when I got married we had to repay some of the credit my wife had already received.) Still, as pointed out, it's not a matter of choosing whether you want to file commonlaw or not. If you are commonlaw you are obligated to file as such.

[slowtyper]

Nice, GST cheques aren't that much but I can use her 10K exemption and she is a student and has lots of tuition...so that will be helpful too.

[renoldman]

Nice, GST cheques aren't that much but I can use her 10K exemption and she is a student and has lots of tuition...so that will be helpful too.

Yeah that $9,600 tax credit (if she has 0 income) is worth $1,440 to you.
(9,600 x 15%)

.....

That's far more than the GST Credit's maximum value of $378 per year.
($94.50 x 4)

[Krox]

Nice, GST cheques aren't that much but I can use her 10K exemption and she is a student and has lots of tuition...so that will be helpful too.

When I first became common-law, it sucked b/c I was a student so I lost all my GST. I couldn't transfer my tution since i used a lot of it since I was getting a scholarship and had to pay tax on anything over $3,000. However, the next year they made scholarships non-taxable, so in essence my 'income' was 0$. So then my g/f got my personal exemption amount and then also got $5,000 in tuition credit. So it worked out better for us.

Personal exemption is $10,320 and she can transfer up to $5,000 (max/year) in tuition. So you she easily be able to get >$2k back in income taxes paid.