Congratulations, you have reached a milestone and have finally retired. You are receiving a pension from your former employer and would like to split it this with your spouse under the pension splitting rules. What is Pension Splitting? If you receive pension income eligible for pension income tax credit, you can split up to 50% of this pension income with…
Many of the income splitting opportunities have been curtailed by a set of rules known as the attribution rules. When opportunities are available, they can be complex, expensive, and difficult to maintain. However, if you and other family members are in very different tax brackets, the benefits may be substantial. Record Keeping Proper records are a must when establishing an income splitting arrangement.…
You may be surprised to know that the federal and provincial governments offer generous personal tax credits for: Persons with disabilities, or The person who supports another person (family member) with a disability. If you or the person you support qualifies, you may be entitled to claim these credits retroactive to the start of the disability (or 10 years back,…
When you sell certain types of property including shares, real estate, a business or farm for a gain you may be able to defer the tax on the capital gain for up to 5 years and in in certain circumstances, 10 years. The Income Tax Act allows you to defer a portion of your capital gain when you sell property but do…
If you are a member of a group medical insurance plan and you pay all or a portion of the premium through payroll deductions, those premiums may qualify as medical expenses for the medical expense tax credit. Other commonly overlooked medical expenses include: Co-payments or non-reimbursed portions of medical expenses Dental bills Certain attendant care expenses for persons with disabilities…
Here is a proven strategy to reduce your overall tax bill by incorporating your business. The top personal tax rate in Ontario is 45% on income over $132,000 and 48% on income over $500,000. For small business corporation, the tax rate is 15.5% and the personal rate for dividends is quite attractive. By incorporating your business and issuing shares to yourself and…
