Don’t think about pension income and simply treat it as income.
The advantage to splitting is it can take one spouse out of a higher income tax bracket and put them into a lower one. I’m sure there are some free online calculators available that will do the math for you and show you how much you can save on tax. If the discrepancy between your incomes is fairly high then there’s probably a fair amount of tax to be saved.
Posted by: SixZeroSixOne
In my case, Mrs6061 will have more income than me (salary) and overall we seem to save tax without pension income splitting.
Has she considered a spousal RSP to give you higher future income?
Posted by: syncro
Don’t think about pension income and simply treat it as income.
The advantage to splitting is it can take one spouse out of a higher income tax bracket and put them into a lower one. I’m sure there are some free online calculators available that will do the math for you and show you how much you can save on tax. If the discrepancy between your incomes is fairly high then there’s probably a fair amount of tax to be saved.
I thought this was only available (in Canada) to "pension" income - so, when she retires (about 4 years after me) we can do this for her work DB pensions. It's the intervening few years until she retires that I was curious about...
(I believe incoming splitting in the US is different in that it's not restricted to pension income - if I've got that wrong please let me know!)
Posted by: SixZeroSixOne
I thought this was only available (in Canada) to "pension" income - so, when she retires (about 4 years after me) we can do this for her work DB pensions. It's the intervening few years until she retires that I was curious about...
(I believe incoming splitting in the US is different in that it's not restricted to pension income - if I've got that wrong please let me know!)
Yes sort of, sorry, I'm thinking of income splitting for investment income and using something called a spousal loan. It's not something I'm super familiar with as it doesn't apply to me, but I am aware of it. You may be too far along to take advantage of it but it could be worth a look.
https://www.rbcwealthmanagement.com/en-ca/insights/how-income-splitting-can-create-tax-savings
The Wealthsimple page on income splitting gives some good general info too.
https://www.wealthsimple.com/en-ca/learn/how-income-splitting-works
Posted by: syncro
Posted by: SixZeroSixOne
I thought this was only available (in Canada) to "pension" income - so, when she retires (about 4 years after me) we can do this for her work DB pensions. It's the intervening few years until she retires that I was curious about...
(I believe incoming splitting in the US is different in that it's not restricted to pension income - if I've got that wrong please let me know!)
Yes sort of, sorry, I'm thinking of income splitting for investment income and using something called a spousal loan. It's not something I'm super familiar with as it doesn't apply to me, but I am aware of it. You may be too far along to take advantage of it but it could be worth a look.
https://www.rbcwealthmanagement.com/en-ca/insights/how-income-splitting-can-create-tax-savings
The Wealthsimple page on income splitting gives some good general info too.
https://www.wealthsimple.com/en-ca/learn/how-income-splitting-works
Yeah, I've now read up on it and seems any sort of income or pension income splitting is not gonna work for me now, or is too much hassle (with too much risk of getting it wrong) for me - and what would only be marginal benefit a short period of time. I'll look into pension splitting again when she approaches retirement....
I don't know much about pension splitting but don't most tax return softwares automatically allocate deductions and credits between spouses where possible for the optimal result?
We use UFile and it does that for a bunch of things like medical expenses for example. You can also override and allocate manually to see the difference.
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