Married & Filing Jointly In Canada

by Tax Guy - Burlington Accountant on March 21, 2011 Print This Post Print This Post

The income tax system in Canada requires that every individual file their own income tax return and report only their own income.

From time-to-time, I come across situations where a married couple has filed only one income tax return as a joint filing. This strategy is not something that is permitted under Canadian tax law and can end up costing you more tax money.

Read on to find out how spouses file taxes in Canada and why filing jointly can cost you!

What Does Filing Jointly Mean?

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In the United States, married couples are permitted to combine their income and file a single income tax return. The US tax brackets and certain deductions are adjusted to reflect the fact that the couple may be reporting higher income. This is what is meant by filing jointly.

In Canada, a married and common law couples are required to report the income of their spouse as a disclosure on their income tax return. Our tax system provides some tax relief through tax credits for couples where one of the spouses has little or no income.

Married couples in Canada should not combine their income and file jointly.

Married Must File Separately

The tax system in Canada is based on individual incomes. There are tax rules to prevent married couples and families from shifting income between related groups. Similarly, there are no provisions to allow combined reporting for married couples.

Rather a married or common law couple is required to report the income from their spouses’ income tax return on the front of their own income tax return. The result is that each spouse only pays tax on their own income.

If You Have Combined Your Income

Combining income on a single tax return can be costly!

Consider the case of an Ontario couple who whose incomes are $25,000 and $18,000 respectively. By filing individual tax returns and reporting their spouses’ income properly, the tax on $25,000 would be $2,800 and on $18,000 the tax is $1,200 for a combined tax bill of $4,000.

If the couple combines their incomes on a single tax return, the tax bill increases to $6,600. By combining incomes on a single return, this couple pays $2,600 of extra income tax!

A Final Word On Disclosure

If you are married or are common law and are considering filing as single, think again. If you are married or common law you must report your spouse’s income and your marital status correctly on your tax return. Failing to do so can result in a reassessment and you may incur interest and penalties.

Looking For Professional Help?

If you’re looking for advice or tax planning services, you can contact me directly through my professional tax practice.

About The Tax Guy...

Dean Paley CGA CFP is a Burlington accountant and financial planner who services individuals and business owners locally, nationally and internationally. Dean has appeared in the National Post, Toronto Star and Metro News.

To find out more, visit Dean's website Dean Paley CGA CFP or connect via Twitter @DeanPaleyCGACFP.

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{ 72 comments }

Sylvie February 27, 2013 at 10:53 pm

Hi,

I was married for over 20 years and filed for divorce July 2011. Paperwork is not final yet but we were living separately but in the same house until December 2012 when my son and I moved out. Can I file as legally separated or do I still have to file as married.
thanks,

Tax Guy - Burlington Accountant February 27, 2013 at 11:24 pm

If you were separated, you can file as separated!

KM February 28, 2013 at 12:53 pm

My Question is , I was recently married in 2012, and now that it is tax season I just found out my Ex had previous CRA debts .

Will CRA take my refunds and child tax that I normally receive , or will they not touch it as it is his previous to a cohabitation relationship

Maikel March 6, 2013 at 11:42 am

Hi ,im from quebec im married my imcome is 34 000 and my wife is 0.00 will i get eny money back

Shah March 6, 2013 at 2:23 pm

Hello,
I use Ufile to file my tax return. The software provides me an option to add a family member i.e. spouse. If this section asks for all the information relevant to my spouse, does that mean the tax return being prepared is for both of us? Also, my spouse became resident in 2012 which means this will be his first time filing the tax return, does he have to file on paper or can he file online as well?

Thanks so much for your time and help!

F April 10, 2013 at 4:33 pm

I filed common law last year, but in september 2012 we broke up, he is seeing someone else, we own a house together and have a child. My child and i live downstaird, him and his girlfriend live up stairs. How would i file single or common Law?

Tax Guy - Burlington Accountant April 10, 2013 at 5:32 pm

You would file as single.

Nancy April 16, 2013 at 4:59 pm

Last year I got married outside of Canada ans sponsor my spouse. Now he is here about 3 months but we haven’t lived together yet because I am continuing my education and living in campus with a roommate. We are planning to have a marriage celebration soon and after that we will live together. So we have not started share financially yet. Do I have to mention his name as my spouse in my tax filing or can I fill as a single? What about him? Does he need to fill tax for himself?

Melissa April 24, 2013 at 11:28 am

I am in midst of planning my wedding, my soon to be husband and I are trying to sort out our tax situation so we can plan for tax season. He owns a condo in Calgary and lives and works in Alberta all of the year except 5 or 6 weeks a year when on vacation. I live and work in Halifax and maintain my own apartment here. I live in Nova Scotia all but 8 weeks of the year when I am on vacation. We each file in our own province or what do we do?

Maureen April 30, 2013 at 7:22 am

My husband claims me as his dependent on his Canadian tax return. Meanwhile, I started two small businesses based in my home last Jan. 2012. I earned well under $10,000 in combined gross income. When is the deadline for both of us to file our tax returns?

Shannon May 1, 2013 at 7:19 pm

I’m married but moved to a different province to be with family and to work. My husband and I are still married and share everything. How do we claim? Still married or so we have to say separated? It is not a breakdown of marriage.

jay Daniels July 12, 2013 at 8:34 pm

Hi there, my wife and i have been married for almost five yrs. I am self employed and just realized that i didnt notify the CRA about being married for each tax year while being married. i was just wondering if there are any consequences for not doing so? Thank you.

Tax Guy - Burlington Accountant July 13, 2013 at 7:52 am

Hi Jay
It depends on your incomes. Some credits and benefits are based on income.

Maria July 25, 2013 at 6:20 pm

Hello I have a question am engaged to my boy friend but we arent living together. We plan on moving in together after we are married or right before so do I wait to clam common law ?

Tax Guy - Burlington Accountant July 31, 2013 at 12:04 pm

Hi Maria,
If you are not living together then you are not common law. In your case, you would be married on your wedding day!

mathews February 19, 2014 at 9:51 am

Hi,

My spouse became PR in Nov last year. Reading through your blog I come across your advise to attach spouse’s income as a disclosure. I am failing to understand how to do that. Moreover my spouse did not have any income last year , should I still file a return for my spouse?
Thanks for your help in advance.

Tax Guy - Burlington Accountant February 22, 2014 at 8:53 pm

The reporting of income is on the first page of the T1. Your spouse should file a return for the year of becoming a resident.

mathews February 19, 2014 at 9:52 am

Adding to my previous question the same rule applies to Quebec Provincial returns as well?

Tax Guy - Burlington Accountant February 22, 2014 at 8:54 pm

Yes

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