[MoneyGal]

CRA doesn't "check who buys homes" but they do correlate addresses and SINs. At some point you may receive a letter asking you to confirm your marital status.

FWIW, I can't think of any financial advantage to you filing separate returns (based on the info you've provided) and can think of tax benefits you may be foregoing.

 

[MoneyGal]

The main benefit of filing as common-law if you meet the definition of common-law is that you are not breaking the law.

Other than that, there are income-splitting opportunities that are available to spouses. Many of them have been outlined in two recent threads here.

In addition, there are a number of tax credits that can be split or shifted between spouses, or only claimed by spouses. Off the top of my head, these include:

- spousal credit
- medical expense credit
- charitable deductions credit
- kids' fitness credit can be claimed by either spouse
- a spouse with no taxable income and taxable dividends can shift the dividends to the other spouse
- age amount, disability amount, education, tuition and textbook credits
- infirm adult credit, caregiver credit
- public transit amount, amount for children, adoption expenses
- LSIF credit can be claimed by either spouse if LSIF is purchased in a spousal RRSP

Oh, and there are spousal RRSPs. And retired spouses can split registered pension income, and CPP.

Many of these situations may not apply to you, but there lots of big and small ways in which you can use the tax system to your advantage and legally reduce the amount of tax you pay.

 

[MoneyGal]

The other problem, it occurs to me, is that unless you plan to not reveal your martial status to CRA ever, you are going to be faced with a problem when you decide to tell them you are (common-law) married.

Here's why: if you decide to file as common-law in some future year, you will need to indicate that your marital status changed over the past year. But if you've already each been filing with the same home address for several years at that point, they will very easily be able to match up your files and see how long, in fact, you've been living together, and when you actually fit the legal definition of common-law spouses for tax purposes.

As a matter of tax policy there should be no strong incentives or disincentives associated with particular family forms (inducing people to get married, for example). And there are no strong incentives either way in Canada, student grant eligibility and GST refund cheques notwithstanding.

However, for better or for worse (hee), while we file taxes in Canada separately, the family is the economic unit for tax purposes - and all social welfare benefits are calculated on a household or family basis. So, if you ever think you are going to take advantage of those programs (and the main ones are associated with having children), or if you ever want to optimize your tax situation by taking advantage of income-splitting or the credits which can be diverted or split between spouses, then it is worth your while to file your taxes accurately.