Kip Powick Posted November 1, 2006 Share Posted November 1, 2006 This is probably early to ask this question but perhaps some legal beagles/tax men have the answer. Income splitting........ Let us imagine a couple having an annual income of $90,000.00 total...all coming in for one person Now we split it so it is $45,000.00 each This puts, in this scenario, each having a NET INCOME of $45,000.00 Both parties qualify for OAS Seeing that the NET INCOME of both parties is below $62,144.00, (that figure is the figure at which the Govt starts to cut back on ones OAS), does this mean that they will both receive FULL OAS benefits............or....do you think the Govt, in its devious ways will calculate the NET INCOME as indicated on the T ? slips ...in this case to one person, calculate the reduced OAS payments and then allow INCOME SPLITTING ??? Any thoughts please. Link to comment Share on other sites More sharing options...
dagger Posted November 1, 2006 Share Posted November 1, 2006 This is probably early to ask this question but perhaps some legal beagles/tax men have the answer. Income splitting........ Let us imagine a couple having an annual income of $90,000.00 total...all coming in for one person Now we split it so it is $45,000.00 each This puts, in this scenario, each having a NET INCOME of $45,000.00 Both parties qualify for OAS Seeing that the NET INCOME of both parties is below $62,144.00, (that figure is the figure at which the Govt starts to cut back on ones OAS), does this mean that they will both receive FULL OAS benefits............or....do you think the Govt, in its devious ways will calculate the NET INCOME as indicated on the T ? slips ...in this case to one person, calculate the reduced OAS payments and then allow INCOME SPLITTING ??? Any thoughts please. If this document doesn't answer your question, it means they haven't made that determination, or at least won't tell you at this point... A number of issues falling under the heading of "very important fine print" don't appear here... But it does define income that can be split as registered income only- not non-registered income or earned income. http://www.fin.gc.ca/news06/06-061e.html#Backgrounder Link to comment Share on other sites More sharing options...
Kip Powick Posted November 1, 2006 Author Share Posted November 1, 2006 Thanks.....be nice if "they" could use simple- plain- easy to follow - language Check your comment re "fine print"....only time will tell. PS..poor Garth, lotsa single dudes dumping on him on his Blog Site and his "in" box will not accept anymore email as I sent him the same request Link to comment Share on other sites More sharing options...
handyman Posted November 1, 2006 Share Posted November 1, 2006 or....do you think the Govt, in its devious ways will calculate the NET INCOME as indicated on the T ? slips ...in this case to one person, calculate the reduced OAS payments and then allow INCOME SPLITTING ??? No, they will not. You split the income not the Government. They will not take your spouse's return and add it to your income reported. I have a business on the side and the income from this business is split between my wife and I. The paperwork shows the income on one sheet and I put it in my return with a note stating that I am splitting the income with my wife. So, I report 50% but the attached paperwork shows all 100%. It's not a problem! Link to comment Share on other sites More sharing options...
Thebean Posted November 1, 2006 Share Posted November 1, 2006 This is probably early to ask this question but perhaps some legal beagles/tax men have the answer. Income splitting........ Let us imagine a couple having an annual income of $90,000.00 total...all coming in for one person Now we split it so it is $45,000.00 each This puts, in this scenario, each having a NET INCOME of $45,000.00 Both parties qualify for OAS Seeing that the NET INCOME of both parties is below $62,144.00, (that figure is the figure at which the Govt starts to cut back on ones OAS), does this mean that they will both receive FULL OAS benefits............or....do you think the Govt, in its devious ways will calculate the NET INCOME as indicated on the T ? slips ...in this case to one person, calculate the reduced OAS payments and then allow INCOME SPLITTING ??? Any thoughts please. Um.....yes, er no....um....maybe.... Brain hurts. Link to comment Share on other sites More sharing options...
Kip Powick Posted November 1, 2006 Author Share Posted November 1, 2006 No, they will not. You split the income not the Government. They will not take your spouse's return and add it to your income reported. I have a business on the side and the income from this business is split between my wife and I. The paperwork shows the income on one sheet and I put it in my return with a note stating that I am splitting the income with my wife. So, I report 50% but the attached paperwork shows all 100%. It's not a problem! Perhaps and perhaps not. I too have had a few businesses and I normally gave my wife 80% and the kids 15% and me 5%, (limited partnership), and avoided the tax crunch on my Income Tax but this is much different as the income comes from RPP and all the T-slips show just me as the recipient. I truly hope you are correct but I wouldn't put it past any govt to calculate OAS payments to the Tslip recipient and then allow income splitting. If they do not do it that way then in most cases both recipients will be entitled to full OAS...which in many cases is a substantial increase in money in ones pocket. I guess time will tell. Link to comment Share on other sites More sharing options...
handyman Posted November 2, 2006 Share Posted November 2, 2006 Perhaps and perhaps not. I too have had a few businesses and I normally gave my wife 80% and the kids 15% and me 5%, (limited partnership), and avoided the tax crunch on my Income Tax but this is much different as the income comes from RPP and all the T-slips show just me as the recipient. I truly hope you are correct but I wouldn't put it past any govt to calculate OAS payments to the Tslip recipient and then allow income splitting. If they do not do it that way then in most cases both recipients will be entitled to full OAS...which in many cases is a substantial increase in money in ones pocket. I guess time will tell. I also believe the rule states above the 62K mark you quoted you payback a portion of the OAS increasing to around the 90K mark where you payback100% of the OAS. Since I’m not into my OAS yet, I haven’t a need to research it further! Added this! Just watched the news and you will be able to split pension income next year (2007). Otherwise, the above holds true. Link to comment Share on other sites More sharing options...
Spinnaker Posted November 2, 2006 Share Posted November 2, 2006 OAS? Link to comment Share on other sites More sharing options...
Mitch Cronin Posted November 2, 2006 Share Posted November 2, 2006 Old Age Security... ...and here I thought that spinnaker was flying off a retirement yacht...? Link to comment Share on other sites More sharing options...
Kip Powick Posted November 2, 2006 Author Share Posted November 2, 2006 Just watched the news and you will be able to split pension income next year (2007). Otherwise, the above holds true Yes that is true...but it will be interesting to see what happens as far as OAS is concerned. No one can give me the answer as to ...if all the pension is going to one individual, can you split it BEFORE you add on the OAS or does the govt use the T-Forms as an indicator as to how much the recipient of the T-forms/pension can get with respect to the OAS and then allow the pension split. Perhaps details will be forthcoming in the near future...and PS...I don't qualify for the OAS yet either Link to comment Share on other sites More sharing options...
mo32a Posted November 2, 2006 Share Posted November 2, 2006 Don't they normally decide whether you are eligible for any government program based on your income tax return, ie GST rebate etc. If that is the case you would have already split the income, so the eligibility would be based on what you had as a net income after deductions. Link to comment Share on other sites More sharing options...
Kip Powick Posted November 2, 2006 Author Share Posted November 2, 2006 Good point and I really hope it works that way. My fear is that they will look at the T-Forms and base the OAS on the total T-Forms going to one recipient....BEFORE the split. It should be based on NET income for each individul but I guess we'll have to wait to see what the tax-man comes out with. If there is a way to twist their policy around...the govt will find it. Link to comment Share on other sites More sharing options...
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