TurboTax’s Pension Splitting Optimizer automatically suggests the best pension distribution for you and your spouse/common-law partner to ensure that you collectively pay the least tax. The optimizer is available only when preparing a coupled spousal/partner return in TurboTax Online.
If your spouse/partner recently passed away, you’ll need to complete their final return separately from yours. To use the Pension Splitting Optimizer, you can first prepare a “mock” coupled return. This will provide the optimal pension split amount to enter on each of your actual separate returns.
To prepare a mock coupled return using TurboTax Online
Note: Enter the same information (T-slips, receipts, and so on) on this mock coupled return that you'll use on your separate actual returns. You'll prepare these returns after determining the optimal pension split amount.
- If you arrive at Welcome back!:
- Select Start your return if you want to use info you provided last year.
- Otherwise, select Create a different return.
- We'll follow the steps for Create a different return.
- Choose any TurboTax product and complete the screens that follow:
- Including, at Which of these applied to you in 202x, select Retired/received pension.
- Continue until you reach Who are you preparing this return for?
- Select My spouse/partner and me, and select Continue.
- At What's your spouse/partner's name, don't check the box for This return is for a deceased person. This will enable the pension splitting optimizer.
- Complete the screens that follow until you reach the second What happened for you in 202X? screen.
- Each spouse answers the question:
- Did you withdraw money from a retirement account or receive retirement-type income, such as a pension or annuity? and if yes,
- Do you want to split eligible pension income with a spouse or common-law partner?
- Input all income, deduction, and tax credit information until you arrive at the We’ve Optimized Your Pension Splitting screen. To jump to this step, select Find from the menu and search Pension split with your spouse.
- At Pension Splitting, indicate who's pension is being split.
- At Pension Splitting, make note of the maximum and optimal (best) pension split amount for you and your spouse/partner.
- You can now leave this mock return.
- Prepare your actual returns, using the amount you noted from Step 8 for the pension splitting, in the couple’s actual separate returns.
