Subject: Re: Child Support tax action - UNFAIR!

From: [email-masked] (Paul J. Bennett)
Date: 12 Mar 1996 17:48:34 GMT

In article <[email-masked]>, [email-masked]
(Luigi Tucci) wrote:
>
>Remeber that this change affects custody orders or agreement entered
>into after May 1997.  So if you are currently paying child support and
>deducting the payments, it will not affect you.
>
>Luigi
>In individuals, insanity is rare; among crowds, it is the norm

-====================================-

Luigi,

Reality check! The changes also apply if the custodial parent petitions
the court to ask for this "tax free" money. Do you really think that there

aren't women out there who are just waiting make this cash grab and drag
the hubby through the courts?

I fully expect to be in the courts to answer her petition for changing
taxes, but it'll cost me. Why? Because she gets legal aid and the weight
of government behind her, I have to pay my own lawyer - in fact, I might
even be obliged to pay a portion of her court costs. It may result in a
lower CS payment, but not after I (and many other fathers) are dragged
through the courts, drained financially, and made to suffer. Isn't the
resulting tension a healthy environment to expose the kids to, eh?

If the government wanted to be a bit more fair, they would make it
absolutely non-retroactive - unless both parties consent. But, then the
women's groups driving this change aren't really interested in fairness,
but revenge.

Regards,

Paul

-- 
[email-masked]  |  The opinions expressed in this post
                 |  are my own

---

From: [email-masked] (Paul J. Bennett)
Date: 12 Mar 1996 18:03:35 GMT

In article <[email-masked]>, [email-masked] wrote:

>>>
>>
>>Buzz!
>>Wrong!
>>
>>Married couples can plan appropriate tax strategies to their joint
>>benefit: child care costs, spousal RRSPs, transfer of credit amounts,
>>claiming dependents, etc. Married couples are in a better position to
>>jointly manage their taxes and expendatures.
>>
>>
>
>
>Divorced couples can also do this.  The custodial parent can still deduct 
>child care costs if they are employed.  This could be of better advantage 
>to a divorced couple if the custodial parent has had the higher income.  
>Only the lower income spouse can claim child care expenses.  Divorced 
>couples would rarely ever be worse off with respect to child care 
>expenses compared to when they were married. (Unless one parent didn't 
>work, in which case I would assume there would be no child care expenses 
>anyway.)
>

Shawn,

Divorced couples cannot do this legally. They are taxed as individuals -
PERIOD.  If you don't belive me, ask Revenue Canada. Do you think I would
pay more taxes these past years than I would have to?!!

Revenue Canada only allows the custodial parent to claim childcare
expenses - not matter what their income. They also get the full equivalent
to married amount. It is also the custodial parent who is the only one
allowed to apply for the child tax credit payment. THAT IS THE LAW! 

>The custodial parent can also claim equivalent to spouse once they are 
>divorced.  I am not sure what other credit amounts you are talking about, 
>but there really are not many others that people generally qualify for.  
>There is no change in transferring tuition.

The tution transfer defaults to the custodial parent unless she is willing
to transfer it to the non-custodial parent. 
>
>As far as spousal RRSP"s are concerned both couples can still contribute 
>to their own RRSP'S and obtain a current tax benefit.  The only benefit 
>with a spousal RRSP is if a higher income spouse can contribute, and the 
>down the road the lower income spouse takes it out when it is taxed at a 
>lower rate.  To take advantage of this people just have to get married 
>again (but why would you marry for tax purposes?)

Spousal RRSPs give married couples the advantage and power of joint
savings, plus the opportunity for the higher income earner to shift a
portion of their salary and taxes. A divorced couple is not allowed to do
that. Again, it is well defined by Revenue Canada. 

>
>Technically divorced or separated couples were in a better position to 
>manage their tax situation. (if they could get along long enough to 
>figure out how).  The new rules level the playing field a little more.

Please explain. If the mother gets all the tax benefits plus tax-free
support, what break does the father get? NONE! Revenue Canada allows no
middle ground. 

The only way a divorced or separated couple could make things work with
minimal stress is if she were willing to make the payments low enough to
avoid being a burden on the man. But, then, amicable splits aren't exactly
in the majority, are they?

>
>Why should married couples be penalized for staying together.  I have 
>seen too many couples who want to take advantage of being separated even 
>though they were not.  I have to tell them its not legal.  But they are 
>usually right.  If you calculate their taxes as a separated couple 9 out 
>of 10 times they are better off(or so it seems)

I don't see how you think married couples are penalized. Do you think it
is something I aspired to? Do you think it is really financially
attractive? Think again! I'd gladly switch places with a happily married
couple any day!

A married couple have the benefit of being only obliged to run a single
household, combined income, being able to coordinate tax and financial
strategies to mutual benefit, both being able to spend as much time as
they like with the kids, no legal costs, court costs, etc.

My income, although the same, is effectively reduced by 60% after paying
CS and maintaining a separate dwelling. With the tax change, it will be
erroded further.

Regards,

Paul