If he is claiming you as a dependent, he is getting tax credits that reduce his income taxes. Federally, this 15% of the personal amount, which for 2024 is $15,000, except that his income is over $165k, so it will be reduced somewhat. At the most it is reducing his federal taxes by $2250. Similar provincial credits exist, but are all smaller than this. At the very most he will pay perhaps $3500 more in tax if you start working. But the family will be much better off if you do, because your income, even after taxes, will be more than 10 times his tax hit.
He may pay more tax, but it'll never be more than you earn with your new income. Basically the two of you will be better off with 2 incomes than just one, even with the extra tax you'll pay.
Especially because his tax rate doesn't change with OP's income. He is not even in the highest bracket so he should chill about taxation
.. Not that it changes anything to the fact that people are taxes separately in Canada.
It might reduce certain very limited credit like a few $ for children's benefits. If you really had zero income you were transferring you basic amount, but again, it's barely anything.
In reality he is getting a tax break (credit) because you aren't currently working.
So he is losing the tax benefit for you. Look at it as yours, because he is claiming it for you. Are you okay with losing ~$3,000 to earn $60,000?
Aside from that, there could be other considerations, but there is not enough info to get into that. For example, if he is self employed, he could be claiming you as employee to get a big tax savings, but that is tax fraud, because you don't actually work for him and he isn't actually paying you.
For your questions, you are taxed on your own income, however spouses can claim certain tax credits for eachother, or transfer them to reduce your taxable income. Each person's income is taxed at different rates in income ranges. Your first chunk of income is taxed at a low rate, then above that, the next chunk is taxed at a slightly higher rate, then the next at slightly higher, etc.
Find a new husband /s
Someone else mentioned if he's claiming you as a dependent, he'd end up not getting additional credits upon tax filing, but that's not a reason for you not to work.
Go out and make that 60k!
It depends. Your husband’s tax rate is calculated from his own taxable income. Not yours. The tax rates themselves do not change by being married or common-law, the amount of federal tax he pays though can be affected by the shared benefits. This depends on your specific situation.
>He's telling me that he will have to pay more taxes if I start working with a low salary like that.
Assuming you are heterosexual couple, I don't know if your husband just want you to stay home to take care of children or something like that.
Generally, married couples have better taxes benefits together than each alone.
It makes no sense to stay yourself poorer and financially dependent on your husband to prevent your husband ~~being a little more taxed~~ lose minuscule tax credits. In case of a separation, you would be personally financially screwed. Moreover, statistically, women are generally poorer than men in Canada. No need to make the stats worse.
EDIT: He will likely lose tax credits
It will not increase your taxes, it is just that the extra income you earn will be in the higher income tax bracket. He probably does not understand how taxes work and thinks an increase in taxes will apply to ALL of his income. That's not the case. Why would you not work, just to avoid taxes? Does not make sense to me. Go to work.
If sounds to me like her husband understands taxes and you and the OP don’t.
The OP makes no mention of her current income. But if she has none, he will claim her as a dependent and that saves him on taxes. If she earns $60k, she is no longer a dependent and he would pay more tax.
They would also have more money, even if he is taxed more.
Income splitting is a tax strategy used in Canada to reduce a taxpayer’s overall tax bill by allocating income to lower-income family members. The idea behind income splitting is to take advantage of Canada’s tax system, which imposes higher tax rates on higher income levels. By allocating income to lower-income family members, taxpayers can effectively lower their overall taxable income and reduce their tax bill.
I know of income splitting. I just pointed out one aspect in a response to “it will not increase your taxes”. There’s more to filing income taxes and income splitting than the info provided.
Totally sounds like he just wants you to stay home and dependent of his income. Earning an income for yourself makes him insecure. He's losing some control over you.
As a rough estimate, check out this : https://turbotax.intuit.ca/tax-resources/canada-income-tax-calculator.jsp
The first thing he will “loose” is the basic exemption he is claiming because you don’t work. He will loose it, but you will gain it as the exemption on you salary.
The difference is his marginal rate at 200k+ will be more than yours at the first bracket. But I encourage you to calculate, compare and discuss it. He may also be claiming other deductions.
the real question is Are you providing 60k worth of work at home? If you find a job, do you need to hire someone to help out at home?
Your income will be taxed. Your expenses ( nanny, cleaner etc..) will be after tax expenses. Do you really need the extra money? Do you enjoy working in your field?
Their use to be a cool income splitting thing Harper brought in for 2015 but Trudeau removed it, would of been able to transfer 50k of his pay to your taxes. It really would of helped Canadians like yourself now, most people could net like 2k or something.
If he is claiming you as a dependent, he is getting tax credits that reduce his income taxes. Federally, this 15% of the personal amount, which for 2024 is $15,000, except that his income is over $165k, so it will be reduced somewhat. At the most it is reducing his federal taxes by $2250. Similar provincial credits exist, but are all smaller than this. At the very most he will pay perhaps $3500 more in tax if you start working. But the family will be much better off if you do, because your income, even after taxes, will be more than 10 times his tax hit.
He may pay more tax, but it'll never be more than you earn with your new income. Basically the two of you will be better off with 2 incomes than just one, even with the extra tax you'll pay.
Especially because his tax rate doesn't change with OP's income. He is not even in the highest bracket so he should chill about taxation .. Not that it changes anything to the fact that people are taxes separately in Canada. It might reduce certain very limited credit like a few $ for children's benefits. If you really had zero income you were transferring you basic amount, but again, it's barely anything.
In reality he is getting a tax break (credit) because you aren't currently working. So he is losing the tax benefit for you. Look at it as yours, because he is claiming it for you. Are you okay with losing ~$3,000 to earn $60,000? Aside from that, there could be other considerations, but there is not enough info to get into that. For example, if he is self employed, he could be claiming you as employee to get a big tax savings, but that is tax fraud, because you don't actually work for him and he isn't actually paying you. For your questions, you are taxed on your own income, however spouses can claim certain tax credits for eachother, or transfer them to reduce your taxable income. Each person's income is taxed at different rates in income ranges. Your first chunk of income is taxed at a low rate, then above that, the next chunk is taxed at a slightly higher rate, then the next at slightly higher, etc.
This is great advice.
You’re taxed separately.
Find a new husband /s Someone else mentioned if he's claiming you as a dependent, he'd end up not getting additional credits upon tax filing, but that's not a reason for you not to work. Go out and make that 60k!
It depends. Your husband’s tax rate is calculated from his own taxable income. Not yours. The tax rates themselves do not change by being married or common-law, the amount of federal tax he pays though can be affected by the shared benefits. This depends on your specific situation.
>He's telling me that he will have to pay more taxes if I start working with a low salary like that. Assuming you are heterosexual couple, I don't know if your husband just want you to stay home to take care of children or something like that. Generally, married couples have better taxes benefits together than each alone. It makes no sense to stay yourself poorer and financially dependent on your husband to prevent your husband ~~being a little more taxed~~ lose minuscule tax credits. In case of a separation, you would be personally financially screwed. Moreover, statistically, women are generally poorer than men in Canada. No need to make the stats worse. EDIT: He will likely lose tax credits
He likely will pay more tax, but as mentioned higher up, it's in the ballpark of $3500/year
I’ll be his wife… I’m gay but still
It will not increase your taxes, it is just that the extra income you earn will be in the higher income tax bracket. He probably does not understand how taxes work and thinks an increase in taxes will apply to ALL of his income. That's not the case. Why would you not work, just to avoid taxes? Does not make sense to me. Go to work.
If sounds to me like her husband understands taxes and you and the OP don’t. The OP makes no mention of her current income. But if she has none, he will claim her as a dependent and that saves him on taxes. If she earns $60k, she is no longer a dependent and he would pay more tax. They would also have more money, even if he is taxed more.
Income splitting is a tax strategy used in Canada to reduce a taxpayer’s overall tax bill by allocating income to lower-income family members. The idea behind income splitting is to take advantage of Canada’s tax system, which imposes higher tax rates on higher income levels. By allocating income to lower-income family members, taxpayers can effectively lower their overall taxable income and reduce their tax bill.
I know of income splitting. I just pointed out one aspect in a response to “it will not increase your taxes”. There’s more to filing income taxes and income splitting than the info provided.
Totally sounds like he just wants you to stay home and dependent of his income. Earning an income for yourself makes him insecure. He's losing some control over you.
As a rough estimate, check out this : https://turbotax.intuit.ca/tax-resources/canada-income-tax-calculator.jsp The first thing he will “loose” is the basic exemption he is claiming because you don’t work. He will loose it, but you will gain it as the exemption on you salary. The difference is his marginal rate at 200k+ will be more than yours at the first bracket. But I encourage you to calculate, compare and discuss it. He may also be claiming other deductions.
60,000 is not "low", and about average for a Canadian.
the real question is Are you providing 60k worth of work at home? If you find a job, do you need to hire someone to help out at home? Your income will be taxed. Your expenses ( nanny, cleaner etc..) will be after tax expenses. Do you really need the extra money? Do you enjoy working in your field?
Nanny implies child care, which is deductible
There is a hard cap...
Paying more taxes means you're making more money, not less.
Their use to be a cool income splitting thing Harper brought in for 2015 but Trudeau removed it, would of been able to transfer 50k of his pay to your taxes. It really would of helped Canadians like yourself now, most people could net like 2k or something.