Both firms have free online versions for students or those with simple returns, but don't miss transferring unused credits or optimizing provisions
like pension income splitting between family members.
And while CPP pensions are not eligible for
pension income splitting on your tax return, you can split your CPP in another way when you apply.
Since CPP is not eligible for
retroactive pension income splitting on your tax return like other forms of eligible pension income, pension sharing is something to consider proactively when applying for your pension.
Trudeau has promised however to
leave pension income splitting intact for seniors as well as introduce a new seniors price index to ensure benefits keep up with rising living costs and a 10 % boost to the GIS for single, low - income seniors.
It's true the need for spousal RRSPs is less apparent since Ottawa
introduced pension income splitting in 2007; with pension splitting, a spouse with a substantial DB pension can «transfer» up to half the pension so it's taxed in the hands of the lower - income spouse.
Pension income splitting allows you to split eligible pension income, which generally includes income like defined benefit pension benefits, RRIF withdrawals, etc..
With the introduction of
pension income splitting in 2007, whereby RRIF withdrawals (after the age of 65) or defined benefit pension income (after the age of 55) can be split 50/50 between spouses, spousal RRSPs are not as important a tool today as they used to be in the past.
Even pension income splitting has been cited as a possible target, which Hectors says would argue for taking advantage of spousal RRSPs, covered in this space last time.
These tax breaks
include pension income splitting, the age credit, and the pension income credit, as well as other provincial perks, and they can add up to thousands of dollars a year.
The most important is
called pension income splitting and it's potentially a much bigger deal than all the outraged headlines about income trusts combined.
The extent to
which pension income splitting will be beneficial will depend on the marginal tax bracket of you and your spouse or common - law partner, as well as the amount of qualifying income that can be split.
It was the same year they levelled the income trust industry by introducing punitive tax rules,
so pension income splitting was a bit of a condolence for seniors, many of whom were heavy into income trusts.
Since CPP is not eligible for
retroactive pension income splitting on your tax return like other forms of eligible pension income, pension sharing is something to consider proactively when applying for your pension.
Liberals: Restore the eligibility age for OAS and GIS back to 65; introduce a new seniors price index to ensure benefits keep up with rising living costs; introduce a 10 % boost to the GIS for single, low - income seniors;
leave pension income splitting for seniors intact.
Macdonald says seven out of ten senior families get no benefit at all
from pension income splitting, while the richest 10 per cent of senior families receive more than the bottom 70 per cent combined.
With
eligible pension income split and income taxed at an average 13 per cent rate before inclusion of TFSA income, the couple would have $ 93,400 to spend each year.
With semi-retirement being more common, Rempel says spousal RRSPs can be more helpful than pension splitting, since spousal deposits are not limited to the 50 per cent rule
for pension income splitting: you can split up to 100 per cent if you wish.
Enhancements include the introduction of the Home Buyers Plan (HBP) in 1992, to assist in the purchase of an eligible home; the introduction of the Lifelong Learning Plan (LLP) in 1999 to help fund post-secondary education; the 2007 change to delay mandatory withdrawals from an RRSP account from age 69 to 71; and the 2007 introduction
of pension income splitting, to allow those over the age of 65 to split up to 50 per cent of their RRIF withdrawals with their spouse on their tax returns.
Pension income splitting is one way for your family to share retirement savings.
Mr. Macdonald singled out five federal tax measures as being the most inequitable to lower income people based on 2011 data — the dividend tax credit, partial inclusion of capital gains, the foreign tax credit, employee stock options and
pension income splitting.
Pension income splitting was introduced in 2007 to allow you to move up to 50 % of your eligible pension income to your spouse or common law partner's tax return if you received pension income eligible for the pension income amount.
In this week's video clip, tax expert Tim Cestnick talks about the good news about personal income taxes in the recent past: decreasing tax rates,
pension income splitting and of course, the introduction of the TFSA.
The precursor to family income splitting was
pension income splitting, which provides a considerable tax break to retirees when one couple has a large employer pension and the other spouse does not.
One feature it has that Quicktax does not is
pension income splitting.
RRIF income also qualifies for
pension income splitting, so that up to 50 % of your RRIF withdrawal can be allocated to your spouse to be taxed on their tax return.
If you're 65 or over, taxable income from an annuity generally qualifies for the pension income tax credit and for pension income splitting
For individuals 65 or older, the RRIF income qualifies for
pension income splitting and the pension income tax credit.
The report estimates that
pension income splitting — which was implemented in 2007 — will cost about $ 1.7 billion in 2015.
For instance, my colleague David Macdonald has identified the five most regressive federal tax expenditures:
pension income splitting, the dividend gross - up, the stock option deduction, credit for partial inclusion of capital gains, and the foreign tax credit.
Pension income splitting and the new Family Tax Cut are other easy measures that can be used to split income and reduce tax retroactively on your tax returns.
Pension income splitting can be done on your annual tax filing with your spouse to equalize income and reduce family tax.