This post is only applicable for Canadians living in Ontario – I apologize in advance!
The idea for this blog post came from a question one of our community members had - this is his first tax season separated and so he was wondering how being separated would affect his taxes, which I thought was such a great question!
I remember my first tax season and thinking – holy smokes, I don’t really care about my taxes and what a hassle to have to coordinate with my ex!! BUT as part of my stubborn side, I had committed to doing my taxes myself, by hand, so that I could fully refresh myself on where my money was going and where I could find further tax savings for future years. I felt like I needed to take charge of my own money and where it was coming and going. :) My ex had done both our taxes for the last long while, so it had been years since I’d even thought about taxes.
Very Thankfully – my ex had an accountant do his the first year we were separated, so all of the ins and outs of coordinating our taxes as ‘separated’ came through his accountant. If I hadn’t had this info I would have surely screwed it up! And Revenue Canada has no heart as far as clarifying or trying to correct taxes, in the case of separation. Their response is to simply not give a credit to either person, if they aren’t correctly coordinated. And no one wants to give Revenue Canada more money than they already get. Ugh.
But as usual, with everything money related, I found myself feeling like I was coordinating with my ex more than we ever had to coordinate while we were married. One of the ironies of being separated I guess.
Now, just to be clear, my ex and I have three kids who are all dependents, we both work, we don’t own any properties together or foreign anything, so our taxes are relatively simple. With that background in mind, below are the areas I found changed when filing my income tax return. And I have to disclose – I have never worked as a professional accountant in my life, these tips are just what I do based on my own personal experience. If you are unsure of whether something applies to you, it would be worth your time and money to have an accountant review it, even just for the first year after separation, so you know what to do next time.
Child care expenses (line 214, T1 General, Form T778): You can claim all the kids you have, however only claim the expenses you actually paid for.
Children’s fitness tax credit (line 458, T1 General): My ex and I share the expenses (50-50) on activities for the kids throughout the year. So, come tax time, we then need to each submit all the tax receipts that fall under the children’s fitness credit. However, we each only claim half of the grand total on our person income tax. (For example, if we spent $500 grand total on children’s fitness things, then we’d each claim $250). If one parent pays for everything and the other doesn’t contribute then the parent who pays for everything, gets to claim the credit in full. If one parent pays 40% and one pays 60%, then the idea would be the same as my case, except instead of 50-50 it’s 40-60. Pro Tip: Don’t both claim the full amount, or you’ll each get no credit from Revenue Canada.
Amount for an eligible dependent (Federal tax, Schedule 5, line 305): If you have two kids, each parent can claim one child – BUT NOT THE SAME CHILD – so make sure you get it right. Figure out who will use what child’s name as a dependent. If you only have one child, you should get to alternate years where you get to claim a child dependent. The same logic is followed for line 5816 on Ontario tax form ON428.
Children’s Art Amount (Federal tax, Schedule 1, line 370): same idea as the Children’s fitness tax credit above.
Step 4 - Ontario tax Reduction (Ontario Tax form ON428, line 6269): Both you and your ex can claim the full number of children you have. For example, I can claim 3 dependent children.
Ontario Children’s activity Tax credit (Ontario credits form ON479, line 6309): same idea as the Children’s fitness tax credit and Children’s Art amount above. Just make sure that you and your ex – combined - don’t claim more than the maximum.
And with that, I wish you all a giant tax refund :) Take care!
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