Married in May 2022. I've prepared three returns to see the advantages (if any) of income splitting.
With the separate returns, no spousal info (Net income, taxable income etc) we have a net refund of ~2,800. Once the spousal return info is entered we have a net tax due of nearly $2600.
I also created a combined return and with "optimization" of pension income, the tax owing is even higher!
What could be the cause of this?
*note the $$ are made up, but represent the situation.
1- You need to make sure you entered your marital status as married- since you were married in May of 2022 - Congratulations!
2-The combined income of you and your spouse or common-law partner is used to calculate:
Canada child benefit (CCB)
Guaranteed Income Supplement (GIS)
Refundable medical expense supplement
provincial low income tax reductions and some tax credits - see the information for your province.
3-You may be eligible for more tax credits and deductions than if you were filing as a single taxpayer and this can help you reduce your overall tax bill for the year.
4- Depending on your total income- it might be putting you in a higher tax bracket and not allowing certain credits. The amount of federal tax you pay though can be affected by the shared benefits.
Thank you for choosing TurboTax.