# Why the huge difference in rebate?



## P$nnyPincher (Feb 4, 2011)

This may be too broad based a question but any obvious answers I haven't considered would be great!!

I did my return earlier this week and calculated refund was $2300. Last night I did my husbands (we do a joint one through Ufile) and my refund dropped to $70 and his was only $1300.

I understand that there are way too many variables but we only have our T4 numbers and RRSP contribution to add, nothing at all complicated.

Did I just goof somewhere or would I be better off being single


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## Jungle (Feb 17, 2010)

Check your numbers again. I have to check mine like 4 times. 
I used to use ufile free trial and studio tax to see if I came up with the same numbers. But I usually made a mistake, as they would not match. Just double check again.


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## plen (Nov 18, 2010)

P$nnyPincher said:


> This may be too broad based a question but any obvious answers I haven't considered would be great!!
> 
> I did my return earlier this week and calculated refund was $2300. Last night I did my husbands (we do a joint one through Ufile) and my refund dropped to $70 and his was only $1300.
> 
> ...


Well what would his end result have been if you enter his numbers alone?


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## OhGreatGuru (May 24, 2009)

Since there are places where his income and marital status will affect your credits, and vice versa, you cannot compare the results of doing your return stand-alone with a computer program that is working on both returns at once. If you did yours manually assuming you were unmarried it was incorrect. 

To find the differences you may have to do both yours and his manually, but feeding in the correct information.


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## ghostryder (Apr 5, 2009)

P$nnyPincher said:


> This may be too broad based a question but any obvious answers I haven't considered would be great!!
> 
> I did my return earlier this week and calculated refund was $2300. Last night I did my husbands (we do a joint one through Ufile) and my refund dropped to $70 and his was only $1300.
> 
> ...



If you put your numbers into Ufile (or any other software) and told it you were married, but didn't put your husband's income info in, the software would assume he has no income. It would then automatically give you things like the spousal credit and other credits that are affected by your spouse's income.


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## sprocket1200 (Aug 21, 2009)

you'd be better off not getting a refund. make sure you fix this for 2011!


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## P$nnyPincher (Feb 4, 2011)

I did them again last night and got the same result. I think it was purely as was suggested, that his income had not yet been entered so I was being given extra credits.

Thanks all for the insight, I knew there had to be a valid excuse. No need for the divorce now then...


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## lakcaj (Jan 8, 2011)

*Married Tax Return*

Good Day,

My wife and I both make about $65k per year. I'm using an online tax program, and after entering my T4 details, I wanted to see the result. On my own, I would have received a return of approx $2000. However, after adding her T4 the return went down to about $150. So, out of curiosity, I deleted my T4 and left hers, and the return went back up to approx $1900. Am I wrong in thinking that if filed separately, we would each get the larger amount, and that we are basically being penalized some $4000 for filing together (2000+1900-150)? Do we get taxed as a single entity making $120k per year? Is there any way out of this??? 

I've tried googling "marriage penalty" and anything else I could think of, but I can't find any explanation. Thanks for your help.


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## stardancer (Apr 26, 2009)

You must file individual tax returns; however if you are married/common law, you must reference each other on the returns. The reason your refund went down is that you lost the spousal credit. As long as the program thought she was zero income, you got the full spousal credit which in turn reduced the taxes owing. As soon as you put in her T4 information, it was high enough that you lost the spousal credit. The same thing happened vice versa.

You are not being penalized for filing together; it just means that you are losing the spousal credit. In Canada, although you file individually, you must reference your marital status. And yes, credits are based on the married rate.

If you filed both without referencing each other, you might get the larger refund from CRA at first, but later on, when CRA does its reviews, you would be caught, penalized and charged interest on the refund to which you were not entitled.


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## OhGreatGuru (May 24, 2009)

In case Stardancer wasn't clear enough, no you are not being penalized. Rather you thought you were entitled to a large refund because you completed your return incorrectly. Presumably you reported that you were married, for which the program nominally assigned you a spousal credit of over $7k. But your spouse's taxable income has to be deducted from this, and you reported no income for her.

If you were to file as separate single people, you wouldn't be entitled to the spousal credit in the first place. This is the problem with computer returns - people don't see how they are calculated so they don't understand what goes into calculating their taxes.

There are actually some circumstances where, in my opinion, you are penalized for being married. But that's another hobby horse of mine, and I don't think is the source of your current confusion.


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