# Common-law vs Single



## yaman (Feb 26, 2011)

Hi there,

I just did my tax return without entering my common-law partners income from line 236. With my significant RRSP contributions I was going to get an aprox $8700 return. My common-law spouse just completed her return and provided me with her net income amount from line 236 and when I entered it my return reduced by $2200 to $6500!

Her return went from $2200 to her owing. Combined that's over $4400 that the greedy government isn't returning to us, the rightful owners!

Last year we filed our returns as common law and didn't realize that this field made a difference to our return.

We don't see the benefit of being "common-law" and don't understand why we would be taxed higher as such. Other than sharing the same bed and home there aren't any benefits we can see.

Why is there a tax difference (we make about the same salary)? 

Would it be a "red flag" if we didn't claim ourselves as common-law but as single since we filed as common-law last year?


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## LBCfan (Jan 13, 2011)

While I am no tax expert, I think you may have done your initial tax return incorrectly. If you did this by computer program, did you change the "Marital Status" box as well as add in line 236? How about her?


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## stardancer (Apr 26, 2009)

The first time, you did not enter your c/l income, so the program gave you the full spousal exemption. When you did enter her income, the spousal exemption was cut back, as it should be. If you claimed as single, you would not get the full $8700 refund anyways, because you would not have a spousal amount.

You could file as single, but if CRA decides to check the addresses, they will question your status. If there are children involved, they will definitely check your status (and hers). This may lead to possible reassessments and penalties. 

Basically, if you have been sharing a bed for 12+ months, you ARE common-law in CRA's eyes. You are not taxed higher if you are c/l or married, but your marital status affects certain credits.


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## OhGreatGuru (May 24, 2009)

yaman said:


> Hi there,
> 
> I just did my tax return without entering my common-law partners income from line 236. With my significant RRSP contributions I was going to get an aprox $8700 return. My common-law spouse just completed her return and provided me with her net income amount from line 236 and when I entered it my return reduced by $2200 to $6500!
> 
> ...


In order to make those differences, it sounds to me like you each filled in your returns claiming to be common-law, for which the computer program assumed you were each nominally entitled to a "Spousal Credit" of $10,382. But then each of you failed to enter (lied about) your spouse's income, which has to be deducted from this credit.

If you truly filed as "single", you would not get the spousal credit in the first place.


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## OptsyEagle (Nov 29, 2009)

yaman said:


> Combined that's over $4400 that the greedy government isn't returning to us, the rightful owners!


Hey, they can't give it all back to you. If they did that, I would have to pay more.

As the others have indicated, it seems like you have entered your marital status incorrectly.


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## yaman (Feb 26, 2011)

*thanks guys*

Hey guys - thanks appreciate it. I didn't do the scenario as a single. You're right as a single my return doesn't change, it's just if I choose common-law and my spouse having $0.00 total net income on line 236.


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