yet another prption 2 incme question

[pc550]

i understand that its the previous years T4 that people go by for proportioning incomes for sec 7's and extra's.

i understand the formula by which it calculates the proportions.

however, any reason why my ex's lawyer is asking for the last 3 years of income tax returns for 'their calculations' ?

they'r not just asking for the t4's for last 3 yrs, (total income statment) they;r asking for the complete tax returns ?

i dunno, maybe i missed something here, wanting to play by the rules.

i searched,,didnt come up with anything !

[blinkandimgone]

It is line 150 of your tax return / NOA, not your T4. Full disclosure includes your T4, NOA and tax return and they are entitled to request it once per year should you not have provided it at tax time to adjust CD annually.

[pc550]

It is line 150 of your tax return / NOA, not your T4. Full disclosure includes your T4, NOA and tax return and they are entitled to request it once per year should you not have provided it at tax time to adjust CD annually.

thank you so much for this.

but leads to another question.

would it just be the previous years line 150 for this years calculations. or for the last 3?

i was under the impression it was the previous year (so for this year, we would base the calculations on the 2014's line 150).

[blinkandimgone]

It depends, if it hasn't been done or you have not exchanged financials in the last few years then three years is reasonable. Also if your income fluctuates for some reason.

Given they are asking for three years it's most likely you have yet to disclose so you should be providing that this year and just the most recent every following year.

[nfc4ever]

Was there a shift in your income that would change the split or support significantly?

[pc550]

this is the 1st year we are travelling down this "proportion to income" path.

yes, there has been an income difference last year, and this year.

so we are starting (just in the last few months) to 'proportion'.

i went with 2014 incomes to do my proportioning, which i thought was pretty standard.

then i got, 'no this is wrong, pls provide last 3 yrs of tax returns'. i did provide the t4's previously, not just the whole return.

fun fun.

[rockscan]

So you are calculating expenses for 2015? Or expenses from the last three years? If youre calculating for this year (example: kid plays hockey for the first time this year) then you just need your tax forms you filed this past spring. If youre calculating the last three years (example: kid has hockey expenses in 2013, 2014 and this tear) you need all three.

I dont understand why they need three years.

[blinkandimgone]

They may be looking for arrears...?

[Rioe]

Tax returns are used instead of T4s in case there's other income to be included.

When getting things started, it's typical to go back three years to see how steady your income is, or if you may have deliberately dropped the 2014 numbers in preparation for getting separated, for example. Some people use an average of the last three years to get going with in those cases.

Once the system is underway, you would just update with the last year's numbers.

Your ex's lawyer is asking a pretty standard question, though honestly, this should have been available to them via financial disclosure already. There may be a financial advantage to them for doing so (has your income dropped? would they try to recalculate previous years?) or they may be fishing for a financial advantage.

You have every right to ask for your ex's last three years' information as well. Don't just let her lawyer do the calculations!