# Looking for a little guidence on some Tax filing questions please



## Clinton (Feb 18, 2014)

Hello everyone! I am going to try to give as much information as I can without getting to detailed..for the obvious reasons.

Short and sweet..I'm VERY lost and could use little push in the right direction. This is my 3rd year doing the family taxes. I used to pay an accountant a couple hundred to do them before but as money has been a bit more tight the last few years we cut out that as an expense'. I say that because I ask that any response to this please not include the obvious answer "hire an accountant". Thanks!

*The situation:*
The two prior years were very simple to file due to the only claims we had were our T4 and our rent on the ON-BEN form.In 2013 that all changed dramatically. Both My wife and I were promoted at our jobs and both our children decided to get enrolled in out of school activities which we paid for. We had quite a few medical expenses and since we work more hours we also had some child care expenses .In October 2013 I started a small home based business that had only start up cost and no income as of December. I have my own dedicated office space in my house for it.

*The Questions:*
So I already know what forms and the proper boxes I need to fill out for the most part. After I filled out our forms using turbotax online it told me that i shouldn't claim my medical expenses because it exceed the limit of my allowed expenses.
Also i did not claim my business expenses/loss either. Can I share those with my spouse?

Can both my wife and I claim the kids as dependents and share the expenses? ex. I claim child care and she claims the medical?

What is the difference between claiming common law and linking our tax returns and claiming common law and not linking tax returns? Also, if I already linked the previous years returns can I not link them this year? I ask these questions because I did it both ways for curiosity and I came up with a way better return when I didn't link our returns but still claimed common-law.

Anyways that's all for now. Any advice is greatly appreciated!
Thanks!!!


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## Spudd (Oct 11, 2011)

The medical expenses should be claimed by the lower income spouse. If they are below a threshold (I think it's around 2k or 3% of your income, whichever is less) then they won't be claimable.

If it is your own business then you cannot share it with your spouse, it will go on your own tax return. You can deduct the expenses and the portion of the home expenses related to the office. 

I don't know the answers to the rest.


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## stardancer (Apr 26, 2009)

Clinton said:


> *The situation:*
> The two prior years were very simple to file due to the only claims we had were our T4 and our rent on the ON-BEN form.In 2013 that all changed dramatically. Both My wife and I were promoted at our jobs and both our children decided to get enrolled in out of school activities which we paid for. We had quite a few medical expenses and since we work more hours we also had some child care expenses .In October 2013 I started a small home based business that had only start up cost and no income as of December. I have my own dedicated office space in my house for it.
> 
> *The Questions:*
> ...


See above


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## MoreMiles (Apr 20, 2011)

As much as you do not want to hear it, there are plenty of threads here about how business owners messed up big time their taxes and got fined stiff penalties. You need to make sure payroll remittance, HST submission, interim instalments are all done properly. Someone got fined like $50,000 for failing to know things. 

Don't be penny wise and pound foolish. Would you buy at any business if they are not professional and run DIY on everything? If you would not visit any unprofessional business yourself, don't give your customer that type of experience either.


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## atrp2biz (Sep 22, 2010)

Child care costs are deductible up to $7,000 per child to the spouse with the lower income (save for conditions noted above). Make sure you have adequate documentation for these costs. We were asked by the CRA to provide documentation and we were able to provide them with the T4 Summary for our child care costs.


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## MoreMiles (Apr 20, 2011)

1. Many refundable credits are available "per family", like HST credit... So if both spouses are claiming it and hiding the fact, wouldn't it considered a fraud? 

2. CRA almost always do receipt audits for Moving Expenses and Medical Expenses... You better make sure there is a receipt to support those claims. They will ask you for them in July / August, a few months after the April deadline.

3. If your accountant only charges you $200 to avoid the mistakes you just enlisted, I think you really should let him/her handle it. It's not what you know (ie, the enlisted ones)... it's about what you don't know yet. Do you really want to take a chance, playing ignorance later will not help you to avoid responsibility.

By the way, my business accountant fee last year was about $8000 with corporation, holding company, investments, payrolls, dividends tracking, etc. it was every penny well spent. I can focus on expanding my business with full energy.


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## Ponderling (Mar 1, 2013)

Dumb comment here - is an accountant at least here not part of a busness expense?


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## Zeeshanbmerchant (Jan 4, 2014)

MoreMiles said:


> 1. Many refundable credits are available "per family", like HST credit... So if both spouses are claiming it and hiding the fact, wouldn't it considered a fraud?
> 
> 2. CRA almost always do receipt audits for Moving Expenses and Medical Expenses... You better make sure there is a receipt to support those claims. They will ask you for them in July / August, a few months after the April deadline.
> 
> ...


Actually point no 1 can't be fraud

In order for an action to be fraudelent it has to have a chance of success  spouses claiming same credits will simply be rejected by cra computer

An accountant was tried for fraud but the case was dismissed because the he proved that his scheme had 0 chance of success


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## Zeeshanbmerchant (Jan 4, 2014)

op make sure you have a business case ready for cra that shows your business has an expectation of profit

Considering you only have expenses they may question the nature of the business


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## Clinton (Feb 18, 2014)

The situation:
The two prior years were very simple to file due to the only claims we had were our T4 and our rent on the ON-BEN form.In 2013 that all changed dramatically. Both My wife and I were promoted at our jobs and both our children decided to get enrolled in out of school activities which we paid for. We had quite a few medical expenses and since we work more hours we also had some child care expenses .In October 2013 I started a small home based business that had only start up cost and no income as of December. I have my own dedicated office space in my house for it.

The Questions:
So I already know what forms and the proper boxes I need to fill out for the most part. After I filled out our forms using turbotax online it told me that i shouldn't claim my medical expenses because it exceed the limit of my allowed expenses.

*As stated, either spouse can claim the medical expenses for the whole family. The balance of the expenses over 3% of one's net income is the credit on schedule 1
* 

_Oh ok. See that's what confused me because our 3% was close to $500 for each of us. our medical expenses only came to like 1200 or 1300 in total. So when I got the message saying that I should wait till next year to claim i was confused. I have to make a few changes from some of the answers I was given after this one so I will try again with the medical claim. Believe me when I say I have been researching these questions on my own for 2 weeks now before I posted here lol. I got so many different answers _

Also i did not claim my business expenses/loss either. Can I share those with my spouse? *No, if it is your business and you do the work, it goes on your return. Use this time, to read up on what you can claim and what not*

_Sorry I should have made that question more clear, I didn't mean share the business claim I meant share the medical because I had yet to claim the business on the return and it was saying I'm already at my max deduction claim amount and to remove the medical. Also do you know if I have to claim my business for last year? I haven't made a cent from it yet and I'm just about to launch the opening next week. I only bought all my licenses last year and some materials I needed._

Can both my wife and I claim the kids as dependents and share the expenses? ex. I claim child care and she claims the medical?

*Usually the higher income earner claims the Amount for Children (line 366) on schedule 1 as it is more beneficial. The lower income earner MUST claim the child care expenses. The only exceptions are if one spouse is in school full time or in prison.*

_So she claims them and I would claim the child care? Even though my return was only approx $500 less that still matters? I assume I check "dependents" and enter their information on both tax returns?
_

What is the difference between claiming common law and linking our tax returns and claiming common law and not linking tax returns? Also, if I already linked the previous years returns can I not link them this year? I ask these questions because I did it both ways for curiosity and I came up with a way better return when I didn't link our returns but still claimed common-law.

*You have children so you MUST claim common-law and your returns must be linked. The reason you came up with a better refund when not linking your returns but claiming c/l is because the program gave you the full spousal amount deduction. CRA would catch that in a heartbeat and you would be re-assessed. You would then be on their radar for years to come.*

_Ohhh ok. See I was reading somewhere that you don't have to link them as long as you claim common law and report their net income on your return. Does it matter if the children are biologically mine? I am their Step-Father but I have been in their lives for 8 years almost and their Mom and I have been living together for 6 years now. We would be married if we knew where to find her Ex to sign papers for divorce. I don't know if any of that info is relevant to how I am supposed to claim our taxes but I've got so many different answers I had to ask_


Anyways that's all for now. Any advice is greatly appreciated!
Thanks!!!


stardancer said:


> See above


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## Clinton (Feb 18, 2014)

MoreMiles said:


> As much as you do not want to hear it, there are plenty of threads here about how business owners messed up big time their taxes and got fined stiff penalties. You need to make sure payroll remittance, HST submission, interim instalments are all done properly. Someone got fined like $50,000 for failing to know things.
> 
> Don't be penny wise and pound foolish. Would you buy at any business if they are not professional and run DIY on everything? If you would not visit any unprofessional business yourself, don't give your customer that type of experience either.


I totally understand what you are saying but I have no payroll or even any income at this point. I only bought my Business License and other multiple operating licenses I needed by law in order to run my business. My actual Launch date is this coming Monday. That's why I was asking If I actually have to claim it this return because I read that since there was no income/profit and only expense/loss I can add it to 2014 when there is a income to put it against.


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## Clinton (Feb 18, 2014)

atrp2biz said:


> Child care costs are deductible up to $7,000 per child to the spouse with the lower income (save for conditions noted above). Make sure you have adequate documentation for these costs. We were asked by the CRA to provide documentation and we were able to provide them with the T4 Summary for our child care costs.


So If I got receipts from the person each time I paid them that's good? I guess I should ask if a babysitter counts, I paid our neighbor's 14 year old daughter to pick up our 8 year old from the bus stop and watch her for two ours each day from Monday to Friday. I got to her sign a paper stating the amount she got paid, the date she was paid and what dates the pay covered. I have her address and phone number but apparently her mom hasn't got her a SIN card yet. I've read that as long as I have the name and address I can claim it, but I also read that I have to have a sin number. Do you happen to know what the actual rule is for that by chance?


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## stardancer (Apr 26, 2009)

Clinton said:


> The situation:
> 
> *As stated, either spouse can claim the medical expenses for the whole family. The balance of the expenses over 3% of one's net income is the credit on schedule 1
> *
> ...


See above


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## stardancer (Apr 26, 2009)

Clinton said:


> So If I got receipts from the person each time I paid them that's good? I guess I should ask if a babysitter counts, I paid our neighbor's 14 year old daughter to pick up our 8 year old from the bus stop and watch her for two ours each day from Monday to Friday. I got to her sign a paper stating the amount she got paid, the date she was paid and what dates the pay covered. I have her address and phone number but apparently her mom hasn't got her a SIN card yet. I've read that as long as I have the name and address I can claim it, but I also read that I have to have a sin number. Do you happen to know what the actual rule is for that by chance?


Yes get receipts, either each time or one receipt for the whole year. A 14 year old babysitter is okay, as long as she is not a relative of yours. At 14, it doesn't matter if she has a SIN, although if she is making a lot of money, CRA might want her to file. If you hire anyone older (18 or so), then she/he should have a SIN


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