This Saturday is Valentine’s Day — that greeting-card-inspired celebration that turns up the heat on romance and inspires mad gestures of chocolate and roses.
It also happens to fall smack in the middle of tax season. And, believe it or not, the Canada Revenue Agency is almost as interested in your relationship status as your mother is.
It’s not uncommon for taxpayers in Canada to be confused about the tax rules and how they intersect with our love lives.
A recent survey by Leger, on behalf of H&R Block Canada, found that more than half of us mistakenly think that married and common-law spouses can file a joint return to save money on their taxes. Another 40 per cent believe it’s up to us to decide whether to claim our marital status on our tax returns, while a handful of respondents doubt the CRA has guidelines to determine that status.
Truth is, there are rules around romantic partnerships, lots of them, and failing to fully comprehend the finer points could cost you money and get you into plenty of trouble.
Know the rules
“Your marital status can have a major impact on your return so it is important to understand how to claim it correctly so you don’t miss a thing,” says Caroline Battista, senior tax analyst with H&R Block Canada.
First things first: A joint tax return is something that Americans file. In Canada, tax payers file individually, whether they are living in a common-law relationship or married.
That doesn’t mean you file as a single person. Couples are required by law to check the correct status box in tax forms.
Family incomes in Canada are not combined for the purpose of calculating tax; however, they can be for the purpose of calculating income-tested benefits, such as the GST/HST credit or the National Child Benefit supplement.
Couples also stand to benefit from combining their charitable donations, transit passes and medical expenses.
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