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Family Tax Cut/Income Splitting

Family Tax Cut/Income Splitting

Family tax cut

Under Canada’s tax system, federal personal income tax rates increase with the level of taxable income of the individual. As a result, a couple in which one individual has a higher taxable income than the other often pays more federal income tax than a couple where both individuals have equal taxable income.

On October 2014 the government has allowed the family income being added together and divided by 2, so the families are paying somewhat equal taxes.

 

This new tax treatment is effective in 2014 and subsequent years.

To be eligible your spouse or common-law partner must be a resident of Canada on December 31, have kid(s) under 18, not in prison, not in bankruptcy for that year, both have to file taxes.

Claim this on schedule 1-A.

This claim will not make any HST, UCCB, and child tax benefits,

Average Savings:

Family income of $50,000 can save ~$423

Family income of $100,000 can save ~$977

Family income of $180,000 can save ~$1,116

For more information contact the Bookkeeping Company of Ottawa at 613-266-7013