Justin to take away income splitting IF ...................................

[valve37]

New LPC radio ads

We’re setting the record straight on the Conservative income splitting scheme.

Listen and share →

http://goo.gl/ycEA4r

Tuff for JT to take it away when he's not in power and would be political suicide if and when he were for it becomes effective with the 2014 tax year!

[valve37]

The "Put Your Trust in justin" song!

http://bowserandblue.com/you-tube-play.php?id=40411

[disisus]

Will you get a tax break from the Conservatives income splitting plan?

http://www.thestar.com/news/canada/2014/11/07/will_you_get_a_tax_break_from_the_conservatives_income...

Answer these few questions and you'll have your answer.

[valve37]

Well yes, the original over 65 plan has been super for me. Unfortunately I don't have children under 18 at home so I'm lucked out on the family plan. Now if I were to remarry a child bearing 25 year old ............................................. just a thought!

[disisus]

If you'll get something back from the Conservatives income splitting plan, here is a more comprehensive calculation on what you might get back.

For example: If you had children under 18 and one spouse made 20,000 and the other 100,000 then you would get back 2,000. which is the maximum.

http://incomesplittingcanada.com/

Les

[2014sportsterguy]

Politics usually put me to sleezzzzzzzzzzzzzzzzZzzzZz

[valve37]

Going back to my thought Les if it were to materialize would I benefit from both plans? There are probably families out there that do fit that scenario.

[disisus]

Since I haven't seen the actual details or income tax form that would allow income splitting for couples with children I wouldn't know if you can claim it twice. However, if you could claim the same income splitting benefit twice, once for having children under 18 and the other for being over 65, then the Conservatives didn't do their due diligence in figuring this out.

It's more likely that Grandparents might be raising their children's children.

So I have a question for you. What taxable benefits have the Conservatives introduced that would benefit couples whose children are grown up, don't live at home anymore, and both are either still working with similar incomes or one or both are retired but neither are 65 yet.?

I work with a group of people that are typical of many work places in Canada. The employees are getting older but not enough to retire and don't have children living at home anymore. The employees are in their 40's or 50's, children have left home ( over 18 now ) and in many cases both spouses are still working and in some cases, one may be retired and the other not. One may make slightly more than the other but in many cases the difference may not be huge. The Conservatives introduced the TFSA's, but if you still have unused RRSP room, it's usually better to use that.

I'm talking about all the baby boomers. What's in it for them? They pay all these taxes and all these boutique tax cuts go to others.

I consider myself fortunate and I don't begrudge my tax dollars going to help others. But I want it to go to the people that need it the most. I don't want it to go to people that don't need it. According to the economists, 40% or more of this money is going to rich people. Families that have above average incomes while the people with children with below average incomes will get nothing from income splitting. That doesn't seem fair to me and not a wise investment of my tax dollars.

Jim Flaherty realized that before he died.

[davca.8je2v]

I have a question for you. What taxable benefits have the Conservatives introduced that would benefit couples whose children are grown up, don't live at home anymore, and both are either still working with similar incomes or one or both are retired but neither are 65 yet.?

just for your information, anybody that is on a retirement pension and married can split that pension. You do not have to be 65. There are a lot of military that have retired after 25 years (so some as young as 41) that have gone back to work and collecting a military pension that split that pension and save a lot of money by doing so.

[disisus]

Thanks for the info.

My husband retired early and I'm still working. My working income is about double his pension. So how would that work?

[davca.8je2v]

Well you should transfer at least $2,000 of his pension to your income (there is a special form you fill in) The first $2,000 of pension money is "tax free". so he will get the $2,000 deduction and so will you. Won't make you rich but will save you at least $400 in income tax

[disisus]

We have an accountant do our taxes. I don't get anything more back as far as a refund goes ( less actually ) but he seems to get a lot more back than when he was working.

I should ask to see the actual details. They've done our taxes for years so I don't scrutinize the details anymore. smileyhappy:

[davca.8je2v]

could be-with you taking the $,2,000 the $400 savings is going onto his refund (his income is now $2,000 less) while with yours the $2,000 goes on then back off so would make no "real change" in your return. A "good" accountant should actually explain all this to you and show you the savings, as in some very rare situations it could hurt your taxes.

[pierrelebel]

Hi Les, take a look at: http://www.cra-arc.gc.ca/vdgllry/wtchds/menu-eng.html?clp=wtchds/pnsn13-eng

It explains how a retiree (age 65+) earning more than a spouse can transfer some pension income to the lower income spouse ---> income splitting.

If both spouses are in the same tax bracket, there is no advantage.  The tax saving - if any - is generated by a spouse in a higher tax bracket transferring taxable income to the spouse in the lower tax bracket.

The subject is complex.  It is well worth spending some time leaning the basics: http://www.cra-arc.gc.ca/pensionsplitting/

As far as the Pension Income Tax Credit ($2,000) you can get more information at:

http://retirehappy.ca/are-you-taking-advantage-of-the-pension/

[davca.8je2v]

It explains how a retiree (age 65+) earning more than a spouse can transfer some pension income to the lower income spouse ---> income splitting

ANY AGE AS LONG AS ON A PENSION !

If both spouses are in the same tax bracket, there is no advantage.  The tax saving - if any - is generated by a spouse in a higher tax bracket transferring taxable income to the spouse in the lower tax bracket

GUARNATEED TO SAVE AS BOTH THEN QUALIFY FOR THE $2,000 PENSION INCOME DEDUCTION. THAT IS $2,000 LESS IN INCOME THAT THEY HAVE TO PAY TAXES ON--NO MATTER WHAT INCOME BRACKET THEY ARE IN

[pierrelebel]

As stated earlier, the tax credit on pension income is complex.

For detailed information, please refer to the form provided by Revenue Canada:

http://www.cra-arc.gc.ca/E/pbg/tf/t1032/t1032-13e.pdf

As always when it comes to tax questions I strongly recommend one consults a competent tax accountant familiar with your personal circumstances.

[davca.8je2v]

As stated earlier, the tax credit on pension income is complex

Not complicated at all--you can transfer from $1 to 1/2 of the pension amount, You will pay income tax on that money depending on the tax bracket you are in 15% on first $43,953---22% on next $43,954 and 26% on the next $43,954 --and 29% on anything over  $136270. So even if you are making OVER $136,270 and transfer $2,000 you will pay 29% income tax on it but then get a credit back for $2,000 @ 15% meaning you will be paying 14% on that $2,000 which is still LESS than the 15% your spouse would be paying on it even if they were in the lowest tax bracket.

the only problem can be IF your spouse or you were divorced before as the courts will use the income declared on your tax return (which includes pension split amounts) when determining child/spousal support (ran into 1 case of this) and IF you or your spouse is in a seniors home again they include that as income when determining what their rent would be (ran into that 1 time also) --by splitting their pension it saved them money but since his wife is in a home they then raised her monthly rent based on the "total" income she had reported on her tax return.

Unfortunately "some" people must have spent the night at a holiday inn and think they know how everything works, Talk with your accountant to make sure that they have in fact split your pensions--they should be able to tell you the exact amount to the penny what your savings would be by splitting your pension. If they have not split your pension you can ask the government to re-adjust your tax returns for up to 10 years.

[pierrelebel]

I do not know how spending a night at a hotel chain has anything to do with this discussion.

As stated earlier, the tax credit on pension income is complex

Somehow it is important to follow form T1032 step-by-step.

More specifically: "Enter on line 314 of your Schedule 1, $2,000 or the amount from line K, whichever is less"

There appears to be a misconception here that one can create a $2,000 pension deduction from thin air.  It does not work that way.

The transfer of the $2,000 pension tax credit (or part of it) applies to the unused portion of the credit.  It is not meant to duplicate the credit.

As always, when dealing with tax matters,  I strongly recommend one consults with a competent tax accountant familiar with your personal circumstances.

[valve37]

"I do not know how spending a night at a hotel chain has anything to do with this discussion."

All depends Pierre who it is with!

As far as split income calculation I've found it relatively uncomplicated. TurboTax is my little helper.

[nuvistors]

JT will take away income splitting but will give you enough  pot so you will not worry about  it.