Divorced? Five Possibilities to Reduce Your Taxes

Reduce your Taxes It’s tax season again, and divorce and child custody bring up several new situations that can be reported on your taxes. There are also a few new ways to reduce your income taxes and ensure everything is reported accurately.

1. Spousal Support and Taxes

The ex-spouse who pays spousal support can deduct it from their taxes, whereas the ex-spouse who receives the payments must pay tax on the amount they receive. Keep in mind that a lump sum payment of spousal support is not tax deductible.

2. Child Support and Taxes

Child support payments are not usually deductible. However, if the support order was given before May 1, 1997, then the support payments are deductible. Likewise, if a person is receiving support payments from an order given before May 1, 1997, taxes are paid on those payments. Otherwise, no taxes are paid on child support payments received.

3. Equivalent to Spouse Credit

If you receive child support you might be able to claim an equivalent-to-spouse credit for one of your children on your tax return.

4. Legal Fees and Taxes

In some cases, legal fees may be tax deductible. Normally legal fees incurred due to a divorce are not, but fees incurred to enforcing child support or to obtain an order for child and spousal support are.

5. Canadian Child Tax Benefit

The primary caregiver of a child is entitled to claim the Canada Child Tax Benefit. If the situation involves shared custody of the child, each parent is entitled to half of it under normal circumstances.

We are not accountants so for professional accounting advise seek a qualified accountant, but these guidelines can provide you with a basic idea of what to expect when filing your taxes as a divorced Canadian.

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By heather - Last updated: Monday, March 15, 2010
Filed in Child Support, Divorce, Spousal Support • Tags: , ,


Child Support Order by Ontario Court Surprises Family Lawyers

In the largest temporary child-support awarded by a Canadian court, 38-year old Toronto millionaire John Graham Tait was recently ordered to pay $31,015 a month in child support to his ex-wife.

The Globe and Mail reports that family law experts were left rather astounded by the order, with some arguing that it sets a troubling new precedent as to what is “appropriate” in the field of family law and child support.

Madam Justice Susan Greer disagreed with this argument, stating that Mr. Tait’s wife, Susan Desrochers, provided her husband with emotional and financial support during a time when his employment income was “nominal” and “sporadic”. Judge Greer went on to say that this support was never mutual, and Mr. Tait’s child-support payments remained at $350 per month when his yearly income had skyrocketed from $82,452 in 2005 to $6,632,626 in 2008 due to his sudden success in the world of gold mine stock options.

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By johanna - Last updated: Tuesday, March 31, 2009
Filed in Child Support • Tags: , ,