Dealing With Tax Problems: Easy As Pie: Difference between revisions
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Revision as of 06:14, 10 September 2026
S is for SPLIT. Income splitting is a strategy that involves transferring a portion of revenue from someone which in a high tax bracket to a person who is within a lower tax range. It may even be possible to lessen tax on the transferred income to zero if this person, doesn't have any other taxable income. Normally, the other person is either your spouse or common-law spouse, but it could even be your children. Whenever it is easy to transfer income to someone in a lower tax bracket, it should be done.
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After he takes his 2006 standard deduction of $6,400 ($5,150 $1,250 for age 65 or over) together with personal exemption of $3,300, his taxable income is $47,358.