Canadian tax question - employment worth it?
I hope I word this correctly. My husband works full time, and right now I am at home with our two children ages 2 and almost 1. I plan on working full time again when they are both in school but for now we have decided that I will get a job on the weekends to help us have a little bit of extra money.
However, I keep hearing about couples who did this and it "didn't end up being worth it" because they were paying more in taxes.
I live in Ontario, Canada.
How do we know if it is financially worth it for me to work one or two days a week? I would like to work.
- GeorgeLv 68 years agoFavorite Answer
It depends on how much your husband is making. If very very low, or over 50K it won't make much difference. In the middle, it will reduce your CCTB, GSTC, and Trillium Benefit as your income goes up. If you already don't qualify for those based on his income, it won't be that big a deal. If you are qualified for those, if your family income goes over a certain level there will be a reduction in those benefits based on a percentage of the amount over the level.
In any case, it will reduce the spousal deduction. But that basically transfers part of your basic personal deduction from you to him. For the first 10 thousand you make, he'll lose the credit based on your low income, and you'll use up your own basic deduction. It will be a zero total change on account of that deduction until your income goes over 10K.
There are on-line calculators for CCTB and GSTC so you can plug in your numbers and see how your benefits would change.
The family net income thresholds where the clawbacks start are 31K for GSTC in 2011 and 42K for CCTB and related benefits for 2011. Next year's thresholds will be this year's plus inflation.Source(s): On line calculators: http://www.cra-arc.gc.ca/bnfts/clcltr/menu-eng.htm...
- Anonymous8 years ago
It might not be.
I am not too savvy in tax, but I believe that your husband using your basic personal deduction does push his tax brackets up so his higher income will be taxed less. You will have more money, but yes, you will pay tax at a higher rate.
You can solve this by increasing contributions to tax deductible things like RRSPs.