Comments on: What is Income Splitting?

By: Tax Guy

Tax Guy — Thu, 10 Mar 2011 13:02:46 +0000

Stuart,
Let me first clarify that there is no choice in Canada but to file separately! Canada does not allow spouses to “combine” their tax returns or file jointly.

It sounds as if you are using software to complete your tax return and watching the “refund” box while completing the returns is misleading. There are a variety of factors that can adjust the tax owing on both returns and can affect each others returns. For example, if you completed your return first the software will assume your spouse has no income and will add a spousal credit of about $10,000 federally to your return. As soon as you add in your spouses’ income, the credit is reduced or eliminated altogether depending on your spouses’ income.

By: stuart

stuart — Thu, 10 Mar 2011 01:48:42 +0000

Myself and my wife file seperately and I’m wondering why is it that when I add my wifes Net income…after the govt. has taken money off of her. my return has dropped significantly.

By: June Nyholt

June Nyholt — Wed, 09 Mar 2011 23:44:23 +0000

income tax splitting

By: Tax Guy

Tax Guy — Wed, 09 Mar 2011 22:09:51 +0000

June,
It’s hard for me to say, I’m not sure what income you are attempting to split.

By: June Nyholt

June Nyholt — Wed, 09 Mar 2011 21:50:43 +0000

Hi, my husband and I have our own bank accounts and we did income splitting. He owes money and i get money back. How do we figure out how much he should get fom my refund?

By: Tax Guy

Tax Guy — Thu, 03 Mar 2011 21:25:08 +0000

A corporation may be used to separate ownership and or a spouse could be paid a salary.

By: Jennifer

Jennifer — Thu, 03 Mar 2011 20:31:59 +0000

Hey. I have a question. A couple of people i know run their own businesses and say they income split with their spouse. How is this done? Is this legal? Do you have to have a business to do it? They pay out a portion of their income to stay at home spouses and call it income splitting.

By: Tax Guy

Tax Guy — Sun, 27 Feb 2011 00:50:53 +0000

John,
You give your spouse funds and they put them in their TFSA. When they withdraw from the TFSA and invest again, there is no attribution.

By: Tax Guy

Tax Guy — Sun, 27 Feb 2011 00:43:02 +0000

Hi there Ebe, From the way you have explained it, probably not. But take a look at the income splitting guide.

By: Ebe

Ebe — Sat, 26 Feb 2011 23:07:16 +0000

hello, I have a question… my wife is employed and i am self-employed but with a limited income. Can we use some of her income earned on salary and apply this income to me, although no funds have been given to me directly?

Thanks,
Ebe