Should my spouse and I file our tax returns together, or
Spousal tax returns are always filed separately - that is, the tax returns
are prepared separately. However, when tax returns are prepared using
personal income tax return software, most software will give the option of
"coupling" the preparation of both returns. The returns are
still printed and filed separately, but the software will usually highlight
ways in which taxes may be reduced.
You are required to report what your marital status was as
of December 31st of the tax year. This is done by ticking the
appropriate box on page 1 of the tax return. The boxes include:
You are married or living common-law as long as you and
your spouse are not living separate and apart from each other on
December 31st because of a breakdown of the marriage or common-law
relationship. If you are living apart from each other due to some other
reason, you would still be considered married or living common-law.
You must report the name, social insurance number and net income
of your spouse or common-law
page 1 of your
tax return, in order to claim some tax credits.
The combined income of you and your spouse or common-law
partner is used to calculate:
If one spouse is unemployed or has very low
earnings, the other spouse can claim a spousal tax credit. See the tables
of non-refundable personal tax credits for the federal and provincial
territorial amounts of the spousal tax credit.
There are some tax credit amounts which can be combined and claimed on either
Medical expenses - expenses for both spouses should be combined and claimed on the tax return
of one spouse. It is often better to claim all medical expenses for both
spouses on the return of the spouse with the lowest taxable
Donations for both spouses should be combined and claimed on the
tax return of one spouse, because the tax credit for the first $200 of donations is at
the lowest tax rate.
Some tax credits can be claimed by either spouse, or
apportioned between spouses:
line 306 amount for infirm dependants age 18 or older
When investments are held in a joint account, the
investment income (including capital gains) should be reported based on the funds
contributed to the account by each spouse. If the
funds were provided equally by both spouses, then the
investment income would be split equally. This
subject is covered in the Canada Revenue Agency (CRA) web page Line 121 -
Interest and other investment income, under the topic of Bank accounts.
In order for the lower income spouse to be able to
claim more investment income, finances should be arranged
so that the lower income spouse has money to invest.