The strategy became more difficult in 1999, when the federal government brought in the “kiddie tax” rule, which, along with other attribution rules, made the strategy less appealing. There are ways, however, to split income with a minor
With no attribution, a family can contribute more to TFSAs
Many couples are not aware of the full range of options when it comes to splitting income, both before and after retirement. Good planning can significantly increase their combined income
With the prescribed rate at a record-low 1%, couples with varying tax rates can reap significant savings
Clients can transfer 50% of eligible pension income to lower-income spouse — the challenge is knowing when it’s beneficial
Even with pension income-splitting available, a spousal RRSP allows couples to fine-tune their incomes in retirement
There are also lots of other changes that could help curb the Tax Department’s appetite
The Canada Revenue Agency today issued a reminder on the federal government’s new pension income splitting tax measure.New tax rules allow eligible taxpayers to allocate up to half of their eligible pension income (income that qualifies for the pension income tax credit) to their lower-earning spouse or common-law partner when filing 2007 income tax returns.To […]
Senior couples with pension income may now be able to save taxes by splitting their pension income between the two partners. But the strategy only works if one spouse or partner is in a lower income tax bracket than the other. In that case, up to half the pension income of the higher-income spouse can […]