How Does Tax Relief Work: Difference between revisions

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Revision as of 00:58, 1 November 2024

S is for SPLIT. Income splitting is a strategy that involves transferring a portion of revenue from someone who is in a high tax bracket to someone who is in the lower tax group. It may even be possible to reduce the tax on the transferred income to zero if this person, doesn't have any other taxable income. Normally, the other body's either your spouse or common-law spouse, but it could even be your children. Whenever it is easy to transfer income to a person in a lower tax bracket, it should be done. If profitable between tax rates is 20% the family will save $200 for every $1,000 transferred to the "lower rate" significant other.

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