Notify the CRA
They actually have a huge impact on a person’s financial plan. One of the many first key steps after going through a change like this is to notify the CRA (Canada Revenue Agency).
These events can affect the benefits you receive, the credits you can claim and the amount of taxes you will have to pay.
People should let the CRA know:
Separation: Within 90 days
Divorce: By the end of the following month its finalized
Death: As soon as possible
What are your benefits?
When it comes to separation or divorce, there may be benefits like Canada child benefit, GST/HST credit & other provincial benefits you could qualify for when there are no longer 2 incomes combined. Also, if children are involved and who is allowed to claim for an eligible child is dependent on child support payments.
Death of a Partner & Retirement
When a partner dies this can affect the surviving partner by not being able to split income in retirement, the surviving spouse will realize they aren't getting the same benefits and they end up paying more in taxes.
Working with a tax professional can help alleviate some of these issues, and can help with strategies to reduce taxes on your income through these changes.
Until next time,
Christine Walters
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