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  1. #1
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    Default Returning to school full time

    My DH makes about $80k per year and I currently make around $45 which means I won't likely get OSAP or anything else to help with the costs of returning to school.

    If we were to live on just his income and I paid $7500 a year for school for the next two years (sept - april) what sort of deductions would we see?

    I could work part time I'm sure to bring in a little money if that would be advantageous? I'm just not sure how tight things would be without my $45k. I estimate that I would pay about $16k a year in childcare in order to go to school.

    Thanks
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    Hi there,

    In this kind of situation you'd see differences over the next three tax years (Jan to Dec).

    I'll assume the year you start school (in Sept) you've worked up to that point so you'd have around $30K in income for the year. Your tuition costs would be lower the first year because it's only 4 months of school so all the tuition and education would need to be deducted from your tax return. You'd save 21% of the amount paid for tuition plus the education amount and textbook amount so roughly $1000 or so saved in tax. Childcare must be claimed by the lower income spouse ... but the higher income person can claim amounts paid while the other person was in school. So you would claim 8/12ths of childcare for the year and your husband could claim 4/12ths. You would save 21% of tax on your share and he would save around 39% of the childcare he claims.

    Year two (Jan - April and Sept-Dec) you'd have say no income /low income so you could transfer up to $5000 of your tuition credits/education and textbook amount to your husband. All the childcare during the school year would be claimed by your husband. He could also claim you under the spousal credit. At his tax rates, with these deductions, he would save around $8,600 in taxes. If you work and earn a bit of income in this year his claim for the spousal credit would go down (around $1000 to $2000 K in taxes saved) but you'd have the cash from working less amounts you have to claim for the childcare while not in school and being the lower income spouse.

    Year three (Jan - April) would be similar to year one as above assuming you start working after graduation.

    In terms of whether it's worth it to work a bit - that's a hard call to make. Going to school and having kids and a husband and a place to live etc is tough to balance. I completely understand what it's like Any work you do will bring in cash - even after childcare and taxes and the cost of working. You'd need to decide if that left over cash is worth the extra juggling. Going back to school is also tough mentally - there are lots of demands on your attention during the school year so you may want to take the summer off completely and recharge especially if it's only one summer.

    Good luck with your decisions and best of luck at school - going back was hands down the very best thing my husband and I both did and even though it was really tough at times during .... neither of us for a second regret it now

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