Filing your tax returns as a couple can be a daunting task for many Canadians. With the tax rules and regulations changing frequently, it can be difficult to keep up with what you need to know. In this article, we’ll cover everything you need to know about filing your tax returns as a couple in Toronto and Ontario.

First, let’s understand the different ways you can file your tax returns as a couple in Canada. The two options available are:

  1. Filing separately: This means that each partner will file their own tax return separately.
  2. Filing jointly: This means that both partners will file their tax returns together as one return.

Now, let’s dive into the advantages and disadvantages of each method.

Filing separately:

Advantages:

  • Each partner is responsible for their own tax return, which means there is less room for error or miscommunication.
  • One partner’s tax issues will not affect the other partner’s tax return.
  • If one partner has a higher income, they may be able to claim certain credits or deductions that they wouldn’t be able to claim if filing jointly.

Disadvantages:

  • You may miss out on certain credits or deductions that are only available to couples who file jointly.
  • It can be more time-consuming as both partners will need to gather and submit their own tax information.
  • You may end up paying more in taxes as you will not be able to split certain expenses or income.

Filing jointly:

Advantages:

  • You can split certain expenses and income, which may result in a lower tax bill.
  • You may be eligible for certain tax credits and deductions that are only available to couples who file jointly.
  • It can be more convenient and less time-consuming as only one tax return needs to be filed.

Disadvantages:

  • One partner’s tax issues will affect the other partner’s tax return.
  • You may have less control over your tax return as both partners will need to agree on everything that is being claimed.
  • If one partner has a higher income, they may end up paying more in taxes.

Now that you understand the pros and cons of each method, let’s look at what you need to know when filing your tax returns as a couple in Toronto and Ontario.

  1. Know your filing status: You will need to determine whether you are common-law or married, as this will affect how you file your tax returns.
  2. Gather all necessary information: You will need to gather all relevant information, including T4 slips, receipts, and any other documentation related to your income and expenses.
  3. Determine who will claim what: If filing jointly, you will need to decide who will claim what expenses and income.
  4. Take advantage of credits and deductions: Make sure you are taking advantage of all the credits and deductions available to you, such as the Canada Child Benefit or the Home Accessibility Tax Credit.
  5. Seek professional help: If you are unsure about how to file your tax returns as a couple, or if you have complex tax issues, it may be beneficial to seek professional help from a tax expert.

In conclusion, filing your tax returns as a couple in Toronto and Ontario requires careful consideration of the pros and cons of each method. Make sure to gather all necessary information, take advantage of credits and deductions, and seek professional help if needed. By following these tips, you can ensure that your tax returns are filed correctly and that you are getting the most out of your tax situation.