Ask Allan Forum
Get expert answers to your tax questions straight from Allan, our owner and experienced CPA. It’s free, direct, and designed to help you make the best decisions when it comes to your taxes.
Hi,
Can you tell us about options for high earning spouse ??
Thanks
Anu
Hi Anu,
Here are some tax tips for a high-income earning spouse:
1. Contribute to a spousal RRSP. RRSP contributions are deductible, and upon retirement, your lower-income spouse will include the withdrawals in his/her income.
2. Maximize your TFSA contributions. Income earned in a TFSA is tax-free, and withdrawals are not taxable.
3. Make a spousal loan at the CRA's prescribed rate of interest (1%). Your lower-income spouse can then invest the loan proceeds into income-producing investments, and any income or gains earned will be taxable to him/her. This is a great income splitting strategy.
4.Consider using a family trust to split income and gains from investments with children.