Common Tax Questions Series 5 – Odds And Ends

Below are a few commonly asked tax questions related to a few different possible scenarios that you may find yourself in.  Hope these help you in figuring out what to do in your situation.

I have moved provinces several times in 2010 and I am not sure what tax form I should file? I started in B.C. then moved to Alberta before settling in Ontario. Do I have to complete three provincial returns?

No.  For tax purposes, you file a tax return based on where you are living as of December 31. So in this case you would file a federal and Ontario tax return. You will still need to include any slips you received from B.C. and Alberta on your return.

I was married last June. Is it better to prepare a tax return separately or together? 

In Canada, tax returns are filed on an individual basis so you and your spouse should file your own tax returns. You will report your marital status as married and enter your spouse’s name, SIN, birth date and income. Even though you file separately, you can transfer unused credits and combine expenses for greater tax savings.  Also, if you changed your name, you should make a note of it on your return so CRA will update your file.  You should also probably attach a copy of your marriage certificate if you haven’t notified the Canada Revenue Agency already.

My wife and I just purchased our first home. She is a first time homebuyer but I have owned a condo before. Can we still claim the First time Homebuyers Credit?

Yes, your wife can claim the First time Homebuyers Credit even though you do not qualify. To qualify for the First Time Homebuyers Credit you must meet the following criteria:

• The house sale must have closed after January 27, 2009
• Ownership of the home must be in either your, or your spouse’s name
• You cannot have lived in another home owned by you or a spouse in the year you purchased the home or the preceding four years.

The HBTC is a non-refundable tax credit of $5,000 which results in a tax savings of $750 dollars. You don’t have to submit documentation of the house purchase with your tax return, but CRA may ask for proof at a later time.  For more information on the HBTC see: http://www.cra-arc.gc.ca/nwsrm/fctshts/2010/m01/fs100121-eng.html