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Have a Spouse? Lower your tax bill!

There are a number of ways to lower your overall family taxes payable. One of the most common methods is to take advantage of the marginal tax rates by splitting income with your spouse (and other family members). The gist of this method is that income is shifted, legally and without triggering anti-avoidance rules (of which there are many), from the high-rate taxpayer to a lower-rate taxpayer.

For example, if you are a resident of Ontario for 2016 and earned $100,000 in taxable income, you would end up paying about $25,000.00 in income tax (an average tax rate of 25%). However, if you managed to shift $25,000.00 to your spouse, you would pay about $15,000 in income tax and your spouse would pay about $2,700.00. This combined total of $17,700 saves your family unit $7,300 in taxes. That is a lot of money that you could then put towards other things, like paying down your mortgage, taking a vacation, or saving for your child’s education.

Any tax plan will depend on your personal circumstances and future goals. There are no one-size fit all tax plans. That said, it helps to be aware of ways in which you can potentially split income legally. Some permissible income splitting arrangements include:

  • Making an income splitting loan to allow your spouse to earn investment income;
  • Making contributions to your spouse’s RRSP;
  • Implementing an estate freeze;
  • Splitting pension income or sharing CPP payments;
  • Selling income earning property at fair market value;
  • Paying family members a reasonable salary;
  • Making contributions to an RESP; or
  • Splitting the family business into two independent but related ventures.

Talk to FarisCPA today see what options are available for you. Don’t pay more taxes than you have to.

About the Author

pro-tip

Pro Tip

ACCESSING THE SMALL BUSINESS DEDUCTION IN YOUR BUSINESS

The Small Business Deduction gives businesses a tax deduction on the first $500,000 of income. This saves an eligible corporation around up to $50,000 in income taxes. There are a number of conditions that have to be met to be eligible for this deduction.

Great experience dealing with Sam Faris and his team. They were transparent, patient with their explanations and they meet all promises. Highly reliable and trustworthy firm. They promise and they meet all their promises. If you are looking for the best tax consultant firm, I highly recommend Faris CPA.
Response from the owner:Many thanks and much appreciated for the kind and positive review.
Sam Faris is a consummate professional whose expertise, clarity, and warmth make him worth every penny. If you need clear answers and effective solutions for complex situations, he’s your go-to.

I only write reviews when they’re truly deserved, and after meeting with Sam, I’m compelled to share my experience. I’m meticulous about researching professionals before reaching out, and Sam exceeded my expectation.

From the moment I arrived for a consultation on a nuanced issue, Sam greeted me with a warm yet focused demeanor that instantly put me at ease. He was fully present, diving into my situation with laser-like attention.  As I explained my case, he listened intently, then walked me through each aspect with clear, concise expertise, pausing to ensure I had no questions before moving forward. His ability to break down complexity into actionable insights was remarkable.

What stood out most was his honesty and confidence. He calmly assured me that my situation, while intricate, was well within his expertise—backed by his extensive track record of handling far more complex cases. His steady presence and thorough understanding left me feeling reassured.

Sam's stellar reputation, reflected in his consistent high reviews, is no fluke. He’s the real deal: an upstanding professional whose integrity and skill are rare in today’s world. If you’re facing a challenging situation and need straightforward answers, reassurance, and results, contact Faris.
Response from the owner:It has been pleasure working with you and feel free to contact us in the future for any further help needed.
Thank you for all your help. Reliable and highly professional firm.
Response from the owner:Thank you for the positive review.
This is an announcement from Aaron Baer, legal counsel to Faris CPA.

I have been working with Faris CPA for more than 10 years.

Faris CPA is being attacked by Kenneth John Weakley (Oct 1969).

I am posting this review because Kenneth John Weakley has been deleting his reviews and has been reposting them, so that Faris CPA's responses don't always show up.

Faris CPA's position is as follows:

Faris CPA is a well-regarded firm that is compliant with CPA Ontario obligations and has a good track record.

Under no circumstances will Faris CPA be paying Kenneth John Weakley any amount.

Kenneth John Weakley's claims do not have any merit.
Response from the owner:Thank you Aaron for your help. Here is my response to Kenneth John Weakley’s fake reviews: “ A warning about fake Google reviews posted by Kenneth John Weakley. He has been posting fake Google reviews under KenW and ShahramK (or variations) about our firm and other professionals. Kenneth John Weakley keeps posting and removing and reposting fake reviews so that his reviews will stay on top and so that our reply will not show up. We searched him and we found out the below information and that he has been posting those reviews from U.K. Kenneth John Weakley DOB October 20, 1969 Address: 821A Fulham Road, London, U.K. SW6 5HG ( Title: NGL449634) Kenneth John Weakley has been attacking the below professionals as well: David Rotfleisch @ Taxpage Marek Tufman Aaron Baer He has been demanding 25k from our firm and from the above professionals to stop posting those reviews. We wish to emphasize that our firm has always complied with our professional obligations, and the interpretation suggested in the fake reviews does not accurately reflect those obligations. We remain committed to serving our clients with professionalism, transparency, and integrity. We are a well-regarded firm and have a good track record. Please see below link to review our record with CPA Ontario. https://www.cpaontario.ca/protecting-the-public/directories/member/faris-6gchzu”