Jun 24, 2020
Tax advice to partners
Tax advice to domestic partners should be considered in the following aspects:
First, the first tax advice to partners had to do with mortgages.
If you plan to buy a house together, and one of you has a much higher tax bracket than the other, the higher tax bracket should take out a mortgage.
That's because you want people in high tax brackets to apply for mortgage interest.
This would create more savings than a co-mortgage or a mortgage held by a low-tax partner.
Second, on investment income and tax incentives.
Any investment should be below the partner's lower income tax bracket.
That would allow those investments to be taxed at a lower rate, saving you more money.
Third, the health insurance benefit proposal applies to partners.
Your health insurance is tax-deductible for insured couples, but not for insured same-sex couples.
In a same-sex relationship where both partners work, you should stand up for the other person.
If one of you can't work, you should consider getting personal insurance.
Then you can deduct your health insurance
Fourth, separate bank accounts are a good idea.
This seems odd, since most partners end up with joint accounts.
To claim the deduction, you need to prove that you actually paid the money.
If the audit USES a joint account, there is no way to prove who actually paid the fees.
So it makes more sense to keep separate accounts.
Use these accounts to pay your expenses, which will be deducted at tax time.
So there's no confusion about who's paying.
If your partner is not working, you can ask him or her for additional immunity.
To do this, your partner must live with you for a year, earn less than their personal allowance, and receive at least 50 per cent of their total financial support from you.