Business

Tax benefits for both

Married or single

ith the average cost of a wedding in the
thousands of dollars, it would be nice if
you could deduct this expense at income

tax time.

Even though you can’t, be-
ing married can earn you tax
breaks on your income tax
return.

And while none of these
are avaiiable 10 common-law
couples, being unmarried can
also have ‘ts benefits at tax
ume.

The most obvious tax
break for the married man or
woman is the $3,470 married
exemption. The full amount
of this is claimable if your
spouse’s income was not over
$490 in 1984, Because the full
year's exemption is claimable
even if you marry on Dec. 31,
and because only the income
your spouse makes after your
marriage counts towards the
maximum net income allow-
ed, many people choose to
get married in December.

Another benefit of having
a legal spouse is that you can
transfer certain deductions
that your spouse is unable to

use your income tax return by .

filling out Schedule 2 (includ-

.¢ed in the general income tax

return).

Once these deductions’

have been used to reduce
your spouse’s taxable income
to zero, you can transfer all
or part of your spotise’s: age
exemption ($2,360); interest,

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dividends and capital gains
deduction ($1,000); pension
income deduction (31,000);
deduction for persons confin-
ed to a bed or wheelchair
($2,360); or education deduc-
tion ($50 per month that your
spouse attended school).
Even for a healthy spouse not
attending school, tnese
transfers could add up to a
$4,360 transfevable
deduction.

Another benefit of having
a spouse is that the federal
tax credit of $200 (or any
unused portion of it) can be
transferred to your income
tax return after it has been
used to reduce your spouse’s
taxable income to zero. You
can also include on your
return any of your spouse's

A spouse is also beneficial
because you can split your
retirement income by buying
your spouse on RRSP, And if
your spouse hangs on to this
RRSP for three years without
you making further contribu-
tions to it during those years,
che money in the RRSP
becomes taxable in your
spouse’s hands — not yours
-— when it is deregistered.

If you are living in a
common-law relationship,
you're out of luck as far as
claiming any of these tax
breaks goes.

The only time a common-
jaw marriage is treated as a
legal marriage by Revenue
Canada is when calculating
your net income to claim the
child tax credit.

{f you contribute to your
common-law spouse’s RRSP,
you won't be able to deduct
your contribution — it is
regarded as a ‘‘gift.”

But there are advantages to
being single.

For one thing, a married

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couple can have only one
principal residence. But as in-
dividuals living together, you
can have one principal
residence each, providing
they are either inhabited by
your former spouse or wholly’
dependent child, or providing
you have subsmitted an elec-
tion to Revenue Canada to
retain it as such,

Another advantage is that,
as two unmarried penple liv-
ing together, you can each
claim one of your children as
“equivalent to married,” ef-
fectively giving each of you
the married exemption. (This
does not apply if the person
you are living with claims
your child as a dependent.)

Finally, a single parent can
claim as a childcare expense
any babysitting fee paid to an
unrelated person. So you
could pay your partner to
look after the kids.

SHOPPERS
DRUG MART

CORRECTION

Re. February
Money Saver Flyer
Volume 17 #200

The Vicks Vapo-Rub should
read 50 ml. We apologize tor
any inconvenience this error
may cause to our
customers.

© For additional information,

cali or write to:

BOB CHALMERS

OR PHIL MAWANI

ADDRESS:

25 - Sunday, February 17, 1985 - North Shore News

Become a Friend of

ils,
British Combis ef SSA

Children’s Hospital |

- computer applications’ program: is:

. being offered by

A STEP
IN THE
RIGHT

Prarie n:

DIRECTION

BS SWITCH TO A WINNER

UNITED ACCUMULATIVE
RETIREMENT FUND

1 YEAR GROWTH

TO JANUARY 31, 1985

18.5% *

AVERAGE ANNUAL COMPOUND
RATE OF RETURN OF THIS FUND
THROUGH THE PERIOD
DECEMBER 31, 1977 to
JANUARY 31, 1985 WAS

21.6% *

‘OFFER BY PROSPECTUS ONLY.

YORKTON SECURITIES INC.
#800-609 Granviile St.
Vancouver, B.C. V7Y 1G5

669-7752