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 ?
Income splitting is a strategy in which income is shared so that it is taxed among several people.
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.
Liberal Leader Justin Trudeau, who is in Toronto promoting his new memoir, told CBC News in an interview Monday that a Liberal government would move to reverse the Conservatives' proposed income splitting measure should they make good on their promise to introduce it when the deficit is paid off.
But Jim Flaherty's replacement, Joe Oliver, has indicated that the government will keep its election promise and introduce income splitting for families with children under age 18.
Other tax advantages of incorporation can include income splitting with family members if the regulating body for your profession allows them to be shareholders.
30) Through this sort of income splitting, a couple's combined income tax obligation could be reduced.
Income Splitting for Two-Parent Families: Who Gains,
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 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.