If you live in Canada, you have until the end of the month to file your income tax forms. And if you’re anything like me, you’ve been dragging your heels because… let’s face it… it’s not generally a pleasant experience.
There was a time when I didn’t mind filing my taxes. That’s because I used to get a refund. Everyone loves getting money back. And then a couple of years ago something changed – namely my marriage status. And for some reason I went from receiving a small refund, to owing substantial amounts back to the government. I guess not being able to claim my children as dependents has a pretty major effect on the bottom line when it comes to taxes.
You know what else has a major effect? Support payments!
This year I decided to try Ufile’s online tax preparation service, and one of the questions it asked me was whether I paid support payments. Without a concrete separation agreement with my ex, in the past I’ve selected “no”. This year I decided to select “yes”. Although we lack an official document, no one can deny that we have a working arrangement whereby I continue to pay the mortgage in lieu of child support. It essentially comes out to the same, and until she is able to take the house over in her name, we’re making the best of a situation that is not necessarily ideal.
So I figured that I would go back and calculate the amount of the mortgage payments that I paid over the course of 2010, and declare that as my support payment. I do not live in that house. Whether I pay her, and she pays the bank.. or I pay the bank directly… it is my money that keeps the roof over her (and my children’s) head. I had been under the impression that child support payments were declared for tax purposes as a formality only… that they did not have an impact on the end result. Not according to Ufile! When I completed the forms, I sat there staring at the computer screen. Ufile informed me that I had a refund of over $2000. It’s been a long time since I’ve seen any sort of refund. Out of curiosity I changed the support payment to zero and re-calculated. I was expecting there to be a difference. I wasn’t expecting there to be a $3200 difference! Ufile now informed me that I owed $1200. That’s a considerable difference! So of course I put the support payment back in!
I figured that it was a good idea to inform my ex that I claimed that amount on my taxes, because I imagine that they will be interested in seeing a similar offsetting amount when she files. It just occurred to me… I sent her an email… what if she already filed? Nah… she’s a procrastinator too. That’s one of the areas where we were compatible.
I will be watching my mailbox closely over the next few weeks!