Proof of common-law with Tax Return states Single

[aaww]

Hello,

How am I supposed to proof my common-law relationship with my partner? We didn't know that we can (or we should) file our tax return together as 'Common-law'. Instead of that, both of us filed the tax as 'Single'. If I'm going to extend my work permit, how to convince CIC that we are actually in a relationship? Or will CIC consider us as tax evasion because by stating yourself single you would get more tax refund?

We're going to buy life insurance for each other but the tax return seems so important.

Thanks

 

[volkov]

caveat, I am not an expert and with taxation and possible legal consequences, one should probably seek out legal advice rather than speculation on an unofficial forum

you can always correct your tax returns with CRA, fixing mistakes on previously filed returns is common

I think the government departments speak to each other, so it probably isn't a good idea to tell one department one thing and an opposite answer to another department

I'm not sure what you should do, I know I wouldn't claim that I was common law if I wasn't common law on my tax forms too

 

[canuck_in_uk]

Hi

CIC and CRA do not communicate. It doesn't matter what is stated on your NOA for immigration.

There are many threads on how to prove common-law status.

Also, you have committed fraud by filing as single to get more money. You need to amend your tax returns and pay back any money you will owe.

 

[scylla]

Or will CIC consider us as tax evasion because by stating yourself single you would get more tax refund?

CRA will consider it as tax evasion (not CIC). As explained above, you need to file an amendment and pay the difference.

 

[Rob_TO]

Hello,

How am I supposed to proof my common-law relationship with my partner? We didn't know that we can (or we should) file our tax return together as 'Common-law'. Instead of that, both of us filed the tax as 'Single'. If I'm going to extend my work permit, how to convince CIC that we are actually in a relationship? Or will CIC consider us as tax evasion because by stating yourself single you would get more tax refund?

We're going to buy life insurance for each other but the tax return seems so important.

As mentioned it shouldn't be an issue with CIC.

However you have a big problem now with CRA. After you reach 12 months cohabitation, by law you must change marital status with CRA from single to common-law, and you must indicate on tax return in that year what actual marital status is. To not do this is considered tax fraud.

If you or your partner are ever audited in the next 5+ years time, CRA can go back and check this. During an audit you can bet they can and will check your immigration records here with CIC, and can easily determine you were in fact common-law. If that happens you will be forced to pay back everything you were paid in extra benefits that you weren't actually entitled to, plus more in penalties and interest.

Fix your taxes now and pay back what you need to.

 

[TANMEX]

Hello,

How am I supposed to proof my common-law relationship with my partner? We didn't know that we can (or we should) file our tax return together as 'Common-law'. Instead of that, both of us filed the tax as 'Single'. If I'm going to extend my work permit, how to convince CIC that we are actually in a relationship? Or will CIC consider us as tax evasion because by stating yourself single you would get more tax refund?

We're going to buy life insurance for each other but the tax return seems so important.

Thanks

Just my 2 cents about Taxes , don't Single Persons Pay more than Common-law or Married couples ? Yes Single Pays More . Unless that single person is a single parent .

But that's doesn't get out of the hook of committing Tax misrepresentation ( criminal offense according to CRA ) .

 

[Rob_TO]

Yes Single Pays More .

Not true at all. Single people with single incomes low enough to qualify, can get lots of credits/payments from the government like monthly GST/HST payments, and various provincial tax benefits (like Trillium benefits in Ontario).

Once you become common-law CRA then uses family income to calculate this, so with combined income many no longer qualify for these benefits.

 

[TANMEX]

Not true at all. Single people with single incomes low enough to qualify, can get lots of credits/payments from the government like monthly GST/HST payments, and various provincial tax benefits (like Trillium benefits in Ontario).

Once you become common-law CRA then uses family income to calculate this, so with combined income many no longer qualify for these benefits.

Not True at all , Single People pay a higher rate than couples regardless of their income situation , GST refund can always be claimed by one of the couples .
not all singles make little money and not all couples make lots of money , couples however pay a lower rate .

 

[canuck_in_uk]

Not True at all , Single People pay a higher rate than couples regardless of their income situation , GST refund can always be claimed by one of the couples .
not all singles make little money and not all couples make lots of money , couples however pay a lower rate .

Not true. Had my partner and I lied and filed as single, our tax refunds would have been thousands of dollars more, on top of the extra hundreds from the double GST credit. It all depends on income but filing as single does usually result in more money.

 

[scylla]

Just my 2 cents about Taxes , don't Single Persons Pay more than Common-law or Married couples ? Yes Single Pays More . Unless that single person is a single parent .

I would pay far less tax if I applied as single. Unfortunately I'm married. It's thousands of dollars difference for me. I have no children so the single parent thing doesn't apply to me.

Agreed that filing single typically results in more money. Everyone I know has felt this pain once they lost their single status and it's a common complaint each year at tax time (when we all look fondly back to the time we were single and paid less).

I've actually never heard of anyone paying less once they were married / common law. However I'm sure there are some. The majority definitely pay more. Sucks.

 

[Rob_TO]

Not True at all , Single People pay a higher rate than couples regardless of their income situation , GST refund can always be claimed by one of the couples .
not all singles make little money and not all couples make lots of money , couples however pay a lower rate .

I don't think you have any idea what you're talking about. To calculate GST credit you use your family income. Doesn't matter who wants to claim it, each person will need to use the combined income of both people to see if they qualify.

And even if married or common-law, each persons income is taxed at the same rate as if they were single. i.e. 2 individuals making $40k per year will pay tax rate on $40K and will be eligible for credits/benefits based on $40K. A married/CL couple making $40K each will still be taxed at $40K each so total rate is the same, but will not qualify for any credits/benefits since their family income is $80K and becomes too high.

 

[TANMEX]

I don't think you have any idea what you're talking about. To calculate GST credit you use your family income. Doesn't matter who wants to claim it, each person will need to use the combined income of both people to see if they qualify.

And even if married or common-law, each persons income is taxed at the same rate as if they were single. i.e. 2 individuals making $40k per year will pay tax rate on $40K and will be eligible for credits/benefits based on $40K. A married/CL couple making $40K each will still be taxed at $40K each so total rate is the same, but will not qualify for any credits/benefits since their family income is $80K and becomes too high.

I Prepare my taxes myself every year , So I know what I'm talking about ,
A single person making $80k will pay more than a couple making $80K combined .

 

[Aquakitty]

I think you guys are both right. There are cases where your married/common-law return would be higher due to the spousal amount:

https://turbotax.intuit.ca/tax-resources/married-tax-payers/does-being-married-affect-your-tax-rate-in-canada.jsp

I guess it depends on if the spouse is making under the minimum amount.

 

[Rob_TO]

I Prepare my taxes myself every year , So I know what I'm talking about ,
A single person making $80k will pay more than a couple making $80K combined .

You are not comparing the same thing. "Couples" don't make money, individuals make money. The couple will only get tax breaks if 1 spouse earns low enough (under $10K) to be claimed under the spousal credit amount by the other spouse, and get enough back to overcome what they're losing on HST and other credits. So the benefits of getting married/CL, usually only factor in under this specific situation when 1 spouse is not working.

When 2 single people are already earning their own incomes (over $10K minimum), they will most likely lose money when becoming a couple. 2 single individuals making $40K each, will pay less in collective taxes as singles vs a married couple making $40K each ($80K family income).

I think you guys are both right. There are cases where your married/common-law return would be higher due to the spousal amount:

https://turbotax.intuit.ca/tax-resources/married-tax-payers/does-being-married-affect-your-tax-rate-in-canada.jsp

I guess it depends on if the spouse is making under the minimum amount.

Yes, this only happens essentially when 1 spouse is not working. In all other cases, it's a negative or no impact at all to get married/CL for tax purposes.

 

[aaww]

Thank you all for your reply!

After looking back to my issue here, I think I made a mistake in determining my status. Yes, my partner and I did live together for more than a year, but the first couple months we were just roommate (each of us rent a room in a townhouse where 5 people live together). Then we started our relationship. When we filed our tax return, our relationship has not reached 12 months.

So in this case, would 'Single' be okay for us? We're going to file the tax as common-law next year definitely.