The proposal will allow couples to transfer up to $ 50,000 of taxable income to
a spouse in a lower tax bracket up to a maximum benefit of $ 2,000.
Not exact matches
Depending on the situation (like if your
spouse is out of work, or if they are
in a
lower tax bracket than you), contributing to an RRSP might be a great idea even if you have enough retirement savings.
On so - called «income sprinkling,» it's hard to justify letting, say, a doctor split income with a
spouse or kid who doesn't have much to do with the practice, just so a chunk of income can be
taxed in a
lower bracket.
For example, if the higher - earning
spouse in a couple stops working at age 65, the couple may drop into a
lower tax bracket the following year.
The general idea is to shift assets to the
lower - earning
spouse, who can withdraw more
in retirement at a
lower tax bracket.
This would let couples shift income from the person
in a higher
tax bracket to a
lower - earning or stay - at - home
spouse, freeing up cash and reducing a family's overall
tax bill.
If your
spouse or common - law partner is
in a
lower tax bracket than you, shifting this income to his or her hands helps
lower the total family
tax bill.
This is because the IRS views each
spouse as earning half the total income which essentially keeps more income
in lower tax brackets.
Setting up a spousal RRSP is a good idea if you expect your
spouse or common - law partner to be
in a
lower tax bracket than you on retirement.
If you have a
spouse, partner or kids
in a
lower tax bracket than you, consider a prescribed rate loan strategy whereby the higher - income
spouse or partner loans funds to the
lower - income
spouse or partner to invest at the record
low prescribed rate, which is at one per cent until at least March 31.
For couples
in different
tax brackets, pension income splitting allows some of their RRIF income to be
taxed in the hands of the
lower - earning
spouse.
Under the old
tax law, because the
spouse receiving alimony or spousal maintenance is usually
in a
lower tax bracket after a divorce, more money stays with the divorcing couple rather than going to the Federal Government.