Thursday, 12 March 2015

We Got a Family Tax Cut This Year!

Last weekend I sat down and did our taxes. Turns out that we're getting a refund of about $3600. Woohoo!

A shoutout is in order for StudioTax. I've used the program for years. It's free. It's certified by CRA. It's pretty easy to use.

This year's refund is higher than last year's because of the new Family Tax Cut. In Canada, each spouse files their taxes separately. This credit was introduced because with graduated taxes, families with one earner were paying more taxes than a dual earning family earning the same income.


For American readers who can file jointly, it might come as a bit of a shock that the new credit has been a bit controversial north of the border. Some have claimed that it's pressuring women to give up their careers to stay at home. Some have said that it only benefits families that are well off enough to have a single income household. Some have said that unmarried people are being put at a disadvantage because the focus has been on giving families a break.

Do I wish we had a tax system where everyone was happy and everyone believed that they were being treated fairly? Ofcourse I do. Do I think that such a system is possible? That I'm not sure.

As a single income household, I appreciate the $1,200 we're getting back (the maximum is $2,000). I'm not sure that we'd have done anything silly like both take on part time jobs so that we could split our income to save $1,200, but I'm glad that we won't be tempted to now. (Not that I think that two part time incomes is silly, just that it's silly to flip your life around for a $1,200 tax credit.)


So, what will we be doing with our “windfall” you ask?


Part of our refund will go to top up our savings for a destination wedding next winter. The rest will go into the bank account. When we think the bank is getting too high, it will go against our mortgage.

Exciting, right?

One of the great things about living within your means and living on a budget is that you're not living pay cheque to pay cheque. You're not biting your nails hoping your tax refund will appear in your bank account before your next credit card payment is due. You know you have your needs covered, and enough of your wants too. There's a sense of reliability and stability when you have your finances in control.

The down side is that you don't have an awesome story to tell the day after you get your tax refund. C'est la vie.


Conclusion


This year our family got a boost to our income tax refund thanks to the new Family Tax Credit. Seriously, thanks for the extra money! Because of our budget stick-it-to-it-ness, our bigger refund isn't very exciting right now. But, it will go towards a nice trip next year, and that's very exciting for us. Let's call it a win for delayed gratification.


What About You?


Are you expecting a refund this year too?

Will your household benefit from the Family Tax Cut this year too?

Could you write me a good story for how we blew through our refund in, say, a weekend?



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