𝗧𝗼𝗽𝗶𝗰𝘀 𝗖𝗼𝘃𝗲𝗿𝗲𝗱: 0:00 - Intro 2:17 - What is Income Splitting? 4:12 - Hiring a Spouse & Family Members 6:29 - Income Split in a Corporation (Salary) 9:23 - Dividend Splitting in a Corporation 10:06 - Tax on Split Income (TOSI) rules 12:56 - Efficient ways to take out money from a Corporation 18:01 - Optimizing How much Salary to Pay Spouse 21:52 - Attribution Rules for Income Splitting Investments 25:38 - TFSA to Income Split 26:56 - Spousal RRSP 29:28 - Preserving Low-Income Spouse Income to Invest 31:45 - Spousal Loans 33:46 - HELOCs for Low-Income Spouse to Invest 37:15 - Case: How Mark Income Splits with his wife 39:47 - What happens in Divorce? 40:22 - Summary
Thanks Dr's for the great tax advise. Either I didn't pay attention or it wasn't mentioned in your webinar whether a self-employed physician (not incorporated) can also make use of income-splitting option like a corporated practice?
For high income employees, you can make use of the spousal RRSP (discussed in 26:57) and spousal loan (31:51) . The Spousal RRSP allows you to bring down your income by contributing to your lower income spouse's RRSP and you take the tax deduction, when the lower income spouse withdrawals the money in retirement, they will do so in a lower tax bracket. Spousal loans lend money to a lower income spouse to invest and the investment growth will be taxed in the lower earner's hands but your spouse will have to pay interest on the loan to you.
This is a great Video and Advice. Couple of questions if you can please assist with: Wife makes 100k/Year T4 Full Time Employee Husband Makes 200k/Year T4 Full Time Employee as well. If husband employees wife for lets say 40k/year. What will be the tax savings for this? There is no corporation no business and what are the other ways other than employing the partner for income splitting? Both are 35 years old no Kid Can it be done for previous years? Considering Spousal RRSP or Investment Loan is not an option. Will really appreciate your response on this. And also How can this be done what are the formalities needed to be done for this? Thanks in advance
I would definitely check with an accountant about this if not income splitting through a spousal RRSP. What will your wife be doing if she's employed by you for $40K/year if there's no business? If there was a sole proprietorship or side business outside of your salaried job, you might employ your wife as a contractor....but if you get audited, you have to have justification for the pay to your wife.
Be careful…if there is divorce it is not true that there is no implication…things are not automatically split…a bunch of factors are considered (prenup, assets before mariage or kids, salary…) It’s not 50% automatically on all assets. Putting spousal rrsp or filling up tfsa of the spouse is giving her of him money. Not your money anymore. If She/he leaves, it’s gone.
𝗧𝗼𝗽𝗶𝗰𝘀 𝗖𝗼𝘃𝗲𝗿𝗲𝗱:
0:00 - Intro
2:17 - What is Income Splitting?
4:12 - Hiring a Spouse & Family Members
6:29 - Income Split in a Corporation (Salary)
9:23 - Dividend Splitting in a Corporation
10:06 - Tax on Split Income (TOSI) rules
12:56 - Efficient ways to take out money from a Corporation
18:01 - Optimizing How much Salary to Pay Spouse
21:52 - Attribution Rules for Income Splitting Investments
25:38 - TFSA to Income Split
26:56 - Spousal RRSP
29:28 - Preserving Low-Income Spouse Income to Invest
31:45 - Spousal Loans
33:46 - HELOCs for Low-Income Spouse to Invest
37:15 - Case: How Mark Income Splits with his wife
39:47 - What happens in Divorce?
40:22 - Summary
18:00 - CORRECTION: link to the correct table here: tinyurl.com/new-slide
Thanks Dr's for the great tax advise. Either I didn't pay attention or it wasn't mentioned in your webinar whether a self-employed physician (not incorporated) can also make use of income-splitting option like a corporated practice?
Hey, it was mentioned in the webinar at 17:35 - if you're not incorporated, you income split salary but not pay your spouse a dividend.
Is there any strategy for a high income salaried employee?
For high income employees, you can make use of the spousal RRSP (discussed in 26:57) and spousal loan (31:51) . The Spousal RRSP allows you to bring down your income by contributing to your lower income spouse's RRSP and you take the tax deduction, when the lower income spouse withdrawals the money in retirement, they will do so in a lower tax bracket. Spousal loans lend money to a lower income spouse to invest and the investment growth will be taxed in the lower earner's hands but your spouse will have to pay interest on the loan to you.
This is a great Video and Advice. Couple of questions if you can please assist with:
Wife makes 100k/Year T4 Full Time Employee
Husband Makes 200k/Year T4 Full Time Employee as well.
If husband employees wife for lets say 40k/year. What will be the tax savings for this? There is no corporation no business and what are the other ways other than employing the partner for income splitting? Both are 35 years old no Kid
Can it be done for previous years?
Considering Spousal RRSP or Investment Loan is not an option. Will really appreciate your response on this. And also How can this be done what are the formalities needed to be done for this?
Thanks in advance
I would definitely check with an accountant about this if not income splitting through a spousal RRSP. What will your wife be doing if she's employed by you for $40K/year if there's no business? If there was a sole proprietorship or side business outside of your salaried job, you might employ your wife as a contractor....but if you get audited, you have to have justification for the pay to your wife.
Be careful…if there is divorce it is not true that there is no implication…things are not automatically split…a bunch of factors are considered (prenup, assets before mariage or kids, salary…) It’s not 50% automatically on all assets. Putting spousal rrsp or filling up tfsa of the spouse is giving her of him money. Not your money anymore. If She/he leaves, it’s gone.