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  • High Income Tax Bracket for Payor With Child

    Iím not able to find something on this and would appreciate any guidance from others:

    Scenario
    - Child lives primarily with the Ďpayorí and the stbx has every other weekend access
    - Payor makes high income and ex has low income
    - SSAG indicates Payor pays $1200 pm and stbx pay $200 child support back

    Hereís the question:
    - SS is tax deductible and CS is tax free
    - Is there anything stopping the Payor from: Instead of paying $14,400 in SS and receiving $2,400 back in SS, paying $30,000 per year in SS and receiving $15,600 back in CS?
    - this would mean the payor actually gets tax deduction on 30k and gets back 15,600 as tax free income on top.

    Does anyone have experience with this? Are there any risks? Seems like a win win situation.

  • #2
    Yes there is.

    Spousal Support does not affect Child Support.
    That money you give them for Spousal does not increase their Child Support obligation.

    Personally, I don't know what you are trying to accomplish here.
    If you want to enter into some kind of agreement where you are paying SS to lower your taxes and your ex is sending you back money that is tax fraud.

    I don't have experience but I can't think of a judge signing off on such an agreement and even if they do the Tax Laws override the Family Court Laws for your purpose. Revenue Canada could just say "nope".

    Comment


    • #3
      I suppose the only option would be if the income is above 350k and 150k(for cs) bc the rules can bend after those, but I understand judges will not but you would both have to agree to it.

      I mean if there was a way of number crunching it to maximize the cra benefit and you guys agree to a reason why you are overpaying ss and why she would have to pay something back.

      At end of day, if doing a roundabout way of income splitting will create a net of 5k for you and her 500 for something, im sure you can…but u need a cooperative dance partner and a good accountant to number crunch

      Comment


      • #4
        Originally posted by InsideOut View Post
        Iím not able to find something on this and would appreciate any guidance from others:

        Scenario
        - Child lives primarily with the Ďpayorí and the stbx has every other weekend access
        - Payor makes high income and ex has low income
        - SSAG indicates Payor pays $1200 pm and stbx pay $200 child support back

        Hereís the question:
        - SS is tax deductible and CS is tax free
        - Is there anything stopping the Payor from: Instead of paying $14,400 in SS and receiving $2,400 back in SS, paying $30,000 per year in SS and receiving $15,600 back in CS?
        - this would mean the payor actually gets tax deduction on 30k and gets back 15,600 as tax free income on top.

        Does anyone have experience with this? Are there any risks? Seems like a win win situation.

        Est-tu trueblue22?


        Sent from my iPhone using Tapatalk

        Comment


        • #5
          Wow lol

          Wait I thought trueblue had shared time

          Comment


          • #6
            Nope this is someone else but I wouldnít put it past her!!

            Comment


            • #7
              Originally posted by Kkc View Post
              I suppose the only option would be if the income is above 350k and 150k(for cs) bc the rules can bend after those, but I understand judges will not but you would both have to agree to it.

              I mean if there was a way of number crunching it to maximize the cra benefit and you guys agree to a reason why you are overpaying ss and why she would have to pay something back.

              At end of day, if doing a roundabout way of income splitting will create a net of 5k for you and her 500 for something, im sure you canÖbut u need a cooperative dance partner and a good accountant to number crunch

              This is exactly it. Itís income splitting. Incomes are not that high though.

              Could the reason be, instead of equalization, a longer term ss and cs structure has been agreed to.

              There is an offset method, but why would not you just increase the amounts to minimize taxes and benefit both parties.

              I did a search for trueblue22, but havenít read all the posts. Is this user also dealing with a similar scenario? Iím not sure I get the reference.

              Does anyone recommend a good divorce smart accountant or a tax smart lawyer?

              Comment


              • #8
                High Income Tax Bracket for Payor With Child

                Originally posted by InsideOut View Post
                I did a search for trueblue22, but havenít read all the posts. Is this user also dealing with a similar scenario? Iím not sure I get the reference.

                Does anyone recommend a good divorce smart accountant or a tax smart lawyer?
                Trueblue has posted ridiculous comments and (in my opinion) is trying to milk her ex. Ignore my question.

                Your best bet to find a good lawyer is to do a search in your area and go on the lawyer review site and see what people say. You could also go on canlii.org and search your city and spousal support to see what cases have been won/lost for a lawyer name. There is also the option of just calling various lawyers and asking them how good they are with respect to spousal.

                In what I have read there is no win win situation when it involves ss and the goal is to avoid paying it. If you are the payor then you should first ask if your ex is actually entitled to it and how much. Even if ss is owed, why pay more for a measly benefit?
                Last edited by rockscan; 02-14-2022, 04:16 PM.

                Comment


                • #9
                  I have wondered about the lawyers that are not in canlii. The ones that are able to settle files and avoid court more than others.
                  One lawyer office was bragging how they never had to go to trial; I was a bit afraid of that type of situation but maybe they are that good.

                  Comment


                  • #10
                    Originally posted by rockscan View Post
                    Trueblue is a crazy woman trying to milk her ex. Ignore my question.
                    I repeat Rockscan's own words about her situation, and I'm deleted, accused of personal attacks, and marked negative - again. RS continues to actually attack people daily with no consequence. Honestly - is she related or does she work for Jeff?! Why protect her so much? You see the outrageous - obviously wrong comments- yet allow those. She attacks others and that's allowed. But anyone dare mention she's wrong and look out. Think of the amount of quality posters and mods banned or quit over the past 10+ years due to how issues are handled here. Different users, but same situation. Someone with no to little experience but posts constantly, fighting off everyone; yet protected at all cost...
                    Last edited by StillPaying; 02-14-2022, 04:06 PM.

                    Comment


                    • #11
                      If you have issues or concerns about another user or specific posts, please feel free to reach out to a mod to discuss, use the 'report post' option or the 'ignore' option.

                      Thanks!

                      Comment


                      • #12
                        Originally posted by blinkandimgone View Post
                        If you have issues or concerns about another user or specific posts, please feel free to reach out to a mod to discuss, use the 'report post' option or the 'ignore' option.

                        Thanks!
                        Can we start a thread?!

                        Comment


                        • #13
                          Originally posted by pinkHouses View Post
                          Can we start a thread?!
                          Private message will do. Thanks!

                          Comment


                          • #14
                            Originally posted by blinkandimgone View Post
                            If you have issues or concerns about another user or specific posts, please feel free to reach out to a mod to discuss, use the 'report post' option or the 'ignore' option.

                            Thanks!
                            I appreciate the response - and for not being banned!

                            Word of caution though, the last time I used the "report post" option my entire account was deleted and I was banished. Again, for reporting another's personal attack; so please excuse my anxiety. I also msg'd Jeff a few weeks ago asking about my negative status, which he agreed I shouldn't have. A week later and I was Blood again. I believe some transparency would go a long way. You don't have to answer, but blink twice if I'm close...

                            And all honesty, it's good to see your posts again!

                            Comment


                            • #15
                              In the spirit of getting this thread back on track, are there outstanding questions from OP's post to be answered?

                              Perhaps OP can chime in, if they like.

                              Comment

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