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Income Splitting

   Also found in: Wikipedia 0.01 sec.

The right, created by provisions of federal tax laws, given to married couples who file joint returns to have their combined incomes subject to an Income Tax at a rate equal to that which would be imposed if each had filed a separate return for one-half the amount of their combined income.

Income splitting was devised as a result of legislation enacted by Congress in 1948 to equalize the federal taxation of married couples who lived in common-law states and who paid higher taxes than couples who lived in Community Property states and, as a result, have the tax benefits of income splitting.
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As well, incorporating allows for income splitting and other possible tax advantages.
Getting down to business: things to consider by Noce, Roberto / LawNow
These could include: * Reviewing your beneficiaries; rollover provisions of assets to spouses can be done on a tax-free basis and outside the estate; * Income splitting between your spouse, children and other extended family members through a family trust; * Tax sheltering your investment income and ensuring tax effi ciency in your investments; * Implementing an estate freeze; * Creating spousal trusts or discretionary trusts within your will.
Estate planning and the business owner: being prepared is the best ... by Strelioff, Brenda / SaskBusiness
Basic Concepts of Income Splitting If one can successfully direct the recognition of income away from higher toward lower taxed family members, more after-tax wealth will remain in the overall family unit.
Income splitting: issues and opportunities by Altieri, Mark P.; Zucca, Linda J. / The Tax Adviser
 
 
 
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