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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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  #1  
Old 01-16-2013, 10:04 PM
divorce_poor divorce_poor is offline
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Default Extraordinary fees-- No receipts

My twin daughters live with their mother. In the last 2 years, my share of in extraordinary expenses has been $5900 from sports, daycare, speech therapy, piano, and can you believe $469 in vet bills for the dog we had when we were married and now lives with her . All with out any receipts. When I ask for receipts she refuses and says she needs them at income tax time.

I asked her to set a budget but she refuses. I offered to pay $133 extra a month or $1600 a year and she says thats not enough.

Money is very very tight we me, but like a chump I've struggled to come up with $3600 even though I have no real proof of the expenses incurred or ability to claim them on my taxes. I still owe her, according to her anyways $2300. Ive been trying to get replacement stock certificates that I lost so I can sell them and pay her off as my cash flow sucks. They finally arrived on Tuesday, but on Saturday I was served with court papers. I want to do right by my daughters but I need to look out for myself too. Being served with the papers made me mad, but now that its going to the courts my position is I will pay the remaining amount owing in the next 2 weeks if she can provide me original receipts and an affidavit saying she never submitted these expenses to CCRA. If she cant do so I expect a return of funds. Is this reasonable? Do you think the courts will see things my way?

Thank you.
  #2  
Old 01-16-2013, 11:01 PM
Berner_Faith Berner_Faith is offline
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DO NOT PAY ANYTHING WITHOUT RECEIPTS...

That is your biggest mistake... if she wants paid she will provide you with receipts... and certainly stop paying vet costs for her dog... has a similar situation with my current bf's ex... the dog he bought during the marriage stayed with her and the kids, this past summer (2.5 years after they split) she decided she didn't want to dog so he came to live with us.

Again... DON'T PAY ANYTHING WITHOUT RECEIPTS
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Old 01-17-2013, 09:18 AM
Exquizique Exquizique is offline
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Again, no receipts = no payment. Keep repeating that mantra in your head.

Vet bills for the dog are not valid section 7 expenses. I'd love to see someone argue in court before a judge that they are.

If you've already paid out for expenses without receipts, the chances are EXTREMELY SLIM that you will get any money back if it indeed is determined that you overpaid. You might as well write off those amounts, and stop paying out any money without any receipts from now on.
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Old 01-17-2013, 10:10 AM
HammerDad HammerDad is offline
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You've empowered her and enabled her through your years of paying without receipts.

She may need them come tax time, but there is nothing that says you need the original. A scan or photocopy will suffice.

Also, are you paying the after tax amounts or just 1/2 or whatever of the cost? You know she is able to write off a lot of these expenses (the "needs the receipts for tax time") and gets a rebate back, thus decreasing the actual cost of the expense.

But you don't pay for anything without a receipt or a photocopy. And then you advise her you will remit payment directly to the service provider. Further, you advise that you are only obligated to pay the after tax amounts. If these $5500 in expenses create a $1000 rebate to her, than you are only obligated to pay your proportional share of $4500.
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Old 01-17-2013, 12:29 PM
FightingForFamily FightingForFamily is offline
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Yeah I believe for most people the tax rate is around 25%, so if the kids require $4000 in daycare, she pays $4000 but gets $1000 back at tax time.

So in effect you should pay your portion of $3000 only.
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Old 01-17-2013, 12:30 PM
OrleansLawyer OrleansLawyer is offline
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If enforced through FRO, you will likely need to bring a motion to change to address the issues.

Extra-ordinary expenses are incurred for the benefit of children of the marriage. No matter your prior emotional attachment, your dog is not a child of the marriage. Vet fees, or any fee related to the maintenance of property, is the responsibility of the owner of that property.

If receipts are an issue, advise your ex that you will incur the extra $0.10 it costs to photocopy the receipts. Or have her take a picture and e-mail it to you. Or show you the receipt when you go for access.

Quote:
on Saturday I was served with court papers.
Your post indicated that you may be misunderstanding some of the core issues. While it would be improvident to spend more on legal fees than you would otherwise spend on your children, a free consultation with a lawyer may help you better grasp the issues. If you are being exploited, a limited retainer could allow a lawyer to help you negotiate a settlement.
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Old 01-17-2013, 07:24 PM
divorce_poor divorce_poor is offline
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Thanks everyone for your inputs. I spoke with my lawyer today and he said more or less the same about receipts and vet bills. I've have backed down on receipts and vet bill in the past because it did nt seem worth it to involve lawyers, but now that I have to go to court I need lawyer I dont feel comfortable representing myself I left his office knowing I wont pay the vet bill at the very least and hopefully a deduction due to tax implications.

I am a little unclear on the taxes question though.

You have all been saying I dont need the original receipts. Dont I need them if I want to submit them at tax time or is the rule to let her claimat tax time and I deduct her marginal tax rate from the total amount?

She makes over $100K so I think the marginal tax rate is 37% when you combine federal (26%)and Ontario (11.16%) taxes. So does that mean the amount I have to pay goes down by 37%? If thats true that and not paying the vet bill will mean a savings of nearly $2500! Wow! Surely I cant be that lucky!
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Old 01-18-2013, 10:02 AM
HammerDad HammerDad is offline
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Quote:
Originally Posted by divorce_poor View Post
You have all been saying I dont need the original receipts. Dont I need them if I want to submit them at tax time or is the rule to let her claimat tax time and I deduct her marginal tax rate from the total amount?

She makes over $100K so I think the marginal tax rate is 37% when you combine federal (26%)and Ontario (11.16%) taxes. So does that mean the amount I have to pay goes down by 37%? If thats true that and not paying the vet bill will mean a savings of nearly $2500! Wow! Surely I cant be that lucky!
Only the custodial parent can claim tax deductions relating to the child.

And no, your math is wrong when it comes to the deduction. Your ex is entitled to claim these expenses at income tax time and reduce her income by an amount allowed under the income tax act. But it isn't 37% as some things have caps on the amount claimable. Kids sports and stuff, you are only able to claim $550 this year. So if the sports cost $1000, she can write off $550, which will drop the amount maybe $100, so the actual cost fo the sport was $900.

The easiest way to do it is to get her Notice of Assessment and/or T1. You then do a separate return using all of the same numbers EXCEPT the kids expenses. If the rebate numbers are different (and they will be), you subtract one from the other.

So lets say her original rebate was for like for $10k (pulling numbers out of the air here). The second return shows that without the kids deductions, her rebate would've only been $7k. So that means she received $3k back in relation to the kids expenses. You then divide that proportionally to income (you know you only have to pay s7 expenses proportionally to income right????). So if she makes like $100k and so do you, you'd technically be entitled to 1/2 of the $3k. But that could be a fight. So what you do is allocate that $1500 towards the kids various expenses and reduce the amount you pay by that amount.

If you really wanted to get technical, you could do multiple tax returns to figure out what each expenses provides in rebates and then deduct that amount going forward.

You are only obligated to pay your proportional share of the actual s7 expense. That means the net amount. So if she can claim it and receive a rebate back, that reduces the cost and you should benefit proportionally.
  #9  
Old 02-25-2013, 11:12 PM
divorce_poor divorce_poor is offline
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Thanks everyone for your insights. I have to say you have been spot on with what my lawyer advises.

My lawyer and I have have whittled down her claim substantially by deducting non -section 7 expenses like vet bills and minor expenses. Calculated my true share given my income and deducted from that child fitness tax credits leaves me owing her $82! Not the $2300 she was originally asking for. But now she wants to take me to FRO because I have been late getting her the section 7 amounts (not child support payments I am not late on those). I have been broke as my user name says. I have been paying her what I can when I can.

Can she take me to FRO for being late with my section 7 fees? Espescially when I have not been getting receipts (that is going to change) and she just puts them in whatever and tells me about it later when she tells me how much I owe!

I think I should pay her the 80 bucks and let her take me to court and if I win I will sue for costs.
  #10  
Old 02-26-2013, 09:09 AM
Exquizique Exquizique is offline
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Quote:
Originally Posted by divorce_poor View Post
Can she take me to FRO for being late with my section 7 fees? Espescially when I have not been getting receipts (that is going to change) and she just puts them in whatever and tells me about it later when she tells me how much I owe!

I think I should pay her the 80 bucks and let her take me to court and if I win I will sue for costs.
I don't remember if you have a court order or separation agreement filed with the court - do you?

If you do, is a specific amount stipulated anywhere in the order/agreement for Section 7 expenses?

If there is, then she can, at anytime, register the order/agreement with FRO and have them enforce the specified Section 7 amounts. If there isn't, FRO won't enforce it unless there's a specific amount explicitly specified.

Of course, if there is an order/agreement, she can still always go to FRO to have child support enforced through them at anytime, independant or in addition to any child support amounts.
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