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Can my wife and I use income splitting to reduce the tax impact of a Pension Lump Sum payout? We both work full time.
Roughly half per pension payout went in a LIRA, the other half was a lump sum payment, but only 30% was paid in tax for the lump sum, and we are both high income earners.
April 19, 2022
8:48 PM
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Seniors and students
First, it depends on your pension income source, whether it is eligible for splitting or not.
From what you said, you are both high-income earners. Pension income splits are only worth considering if you have a higher marginal tax bracket than your spouse.
For more information and which pension income is eligible for splitting, please click:
TurboTax Understanding Pension Income Splitting for Seniors or Tax Tip: Income splitting benefits.
Thank you for choosing TurboTax.
April 22, 2022
4:33 AM