Income Splitting


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Income Splitting

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.

References in periodicals archive ?
Remember, this is the government that praised reservists, but decreased the budget dedicated to reservist pay, and shrunk their training budget to finance alternative initiatives like income splitting --a $2,000 tax break for the wealthiest few.
Rafferty has faulted the Harper government's income splitting plan for the problem.
Other tax advantages of incorporation can include income splitting with family members if the regulating body for your profession allows them to be shareholders.
Structure your income to take advantage of income splitting opportunities: Whether you are retired now or preparing for that day down the road, an effective plan can not only help you build for the future, but potentially benefit your tax situation today.
The benefits of income splitting enjoyed by most married heterosexual couples via the joint return filing option is not generally available for same-sex partners on their federal returns.
Income Splitting for Two-Parent Families: Who Gains,
Income splitting is perfectly legal, but you cannot just choose to share the rents.
Dedicated staff provides taxpayers with complete resources, such as an online blog that is made available to everyone, where a wide range of financial and accounting content is covered such as income splitting and claiming a spouse or child.
In 1948, most significant MPTs were temporarily eliminated with the adoption of full income splitting for married couples.
Growing numbers of instruments are being enacted to replicate on a smaller scale the effects of income splitting in specific policy contexts.
7872 undoes the income splitting by imputing income to the lender, measured by the difference between interest actually charged on the loan and the government's applicable federal rate.