Does turbo tax reallocate income tax paid on pension income when pension income is split with spouse? How does it know the correct amount, for example if the transferee has paid income tax on both pension and non-pension income in the year? Do I have to adjust this manually, and if so how?
When pension income is split, the tax associated with that pension income is also split in the same ratio. Tax deducted from non eligible income is not affected. And no, you do not adjust what is transferred manually.
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/pnsn-splt/txddctd-eng.html
When pension income is split, the tax associated with that pension income is also split in the same ratio. Tax deducted from non eligible income is not affected. And no, you do not adjust what is transferred manually.
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/pnsn-splt/txddctd-eng.html
Is the income splitting calculation done electronically on the standard turbo tax?
Yes, the standard TurboTax optimizer the Pension Splitting automatically. for further information on how TurboTax optimizes the Pension spitting, please check this link:
I hope this was helpful
This is my first year doing income splitting. The pension amount is only one cheque $5414. I know i can only take half. Why does the program only give me $225. Wouldn't it be in my husbands best interest to put half on me as i am in a lower tax bracket? Taking half does nit put me in higher bracket. Do i change it manually? Or am i missing something? The struggle is real. Help
You are correct that it would be beneficial to use a higher percentage of pension to split.
Please verify the steps to follow in our TurboTax FAQ for guidance: How do I split my pension income with my spouse?
For more information please see our TurboTax article Understanding Pension Income Splitting for Seniors
Thank you for using TurboTax.
How to I retain taxes the same as paid as I want to reallocate only pensions not taxes paid.
Unfortunately, you cannot avoid the tax splitting on the pension chosen to be split. Both the pension and the taxes paid on it are to be split for the same percentage as explained by the Canada Revenue Agency (CRA): "if the transferring spouse or common-law partner allocates 50% of their eligible pension income to the receiving spouse or common-law partner, 50% of the income tax withheld at source on that pension income must also be allocated to the receiving spouse or common-law partner."
Thank you for choosing TurboTax.