—Jeff Wickens, Calgary

A: When you’ve been married a long time it can be hard to remember what is yours and what is your spouse’s. This probably isn’t an issue most of the time, except when it comes to iPads and income tax. You care that your iPad is yours when you want to use it. And the Canada Revenue Agency cares that your income is yours, even when you don’t want it to be.

The CRA’s “attribution rules” are at the heart of your question. Allan Schieman is the founder of Defend Your Wealth, an independent financial research and education company in Calgary. “You can give your spouse any assets you want,” he says, “but the income those assets generate will attribute to you.” In other words, you’ll pay the tax, not her.

A better option is to loan cash or a portfolio of stocks to your spouse and charge her the CRA’s prescribed rate of interest (1% these days). You report that interest income on your tax return, but the income from the portfolio will be taxed in her hands.

I’d consult an accountant for advice specific to your circumstances, and be sure to keep good records in case the CRA comes calling. You could even keep those records on your iPad. Your iPad.

Bruce Sellery is a frequent guest on financial television shows and author of Moolala. Do you have your own personal question? Write to Bruce at ask@moneysense.ca.

Assume both spouses are age 65. Mike’s annual retirement income is $60,000 and Judy’s is $20,000. They pay a total of $11,000 in tax if they live in B.C., factoring in the pension income credit.

However if Mike splits some of his income so he claims $42,600 and Judy claims $37,400, they’d pay roughly $9,000 in tax, saving $2,000 a year. Multiply that by 25 years of retirement and the couple saves a total of $50,000.

The prospect of getting money back is just too good for this eager beaver so I file early every year. I case you’re wondering, I won’t be blowing my tax refund on a shopping spree. As MoneySense Senior Editor David Hodges illustrated in a recent issue, reinvesting the money back into your RRSP is definitely the way to go—the numbers speak for themselves.

That brings me to the reason for this blog post; one BIG reason. It jumped out at me as I tore the perforated edge on my crisp new cheque: “Your unused RRSP contribution room is….” Whoa!—I thought—that’s a big number. I guess I was so surprised because I’m a consistent saver. My RRSP contributions automatically come off every paycheque before I get a chance to spend the money. I’ve been saving this way since I entered the full-time workforce a few years ago.

But in retrospect, I shouldn’t have surprised at all. Here’s why: I’ve been filing income tax returns since I earned my first paycheque as a teenage snack bar attendant at a local hockey arena. That means I’ve been gaining RRSP contribution room every year since I served the first of countless hot chocolates to cold and weary hockey moms more than a decade ago.

Initially I was tempted to ignore the 5-figure number. After all, I’m not alone. Canadians have more than $600 billion in combined unused RRSP contribution room. These apathetic thoughts disappeared however as soon as I realized I just received a gift from my 16-year-old self.

You see, I’m lucky enough to work for an employer that provides a defined-benefit pension plan. For 2012, Canadians can claim the lower of 18% of their earned income or $22,970 as their RRSP deduction unless they are a member of parliament or have a DB pension plan. This second group can only claim that amount less what has been socked away in their other registered plan that year. This is called a pension adjustment (PA) and the amount is reported your T4 slip (Box 52, line 206). My best guess is that this rule exists to level the playing field for all Canadians saving for retirement. And while I’m not complaining by any means, the PA does reduce my personal RRSP annual contribution allowance by a substantial amount. So back to that gift…now that I’m a little older, a little wiser and earning a full-time salary I can tap that unused room and for the time being pay less tax. Sure, I’ll be taxed on my savings eventually, but if time my withdrawals properly (when my income is low) it shouldn’t sting too much.

So thank you 16-year-old me for the huge RRSP potential! Of course in order to realize this potential, adult me has to up my savings game. It will be impossible to catch up to my unused RRSP room in one year, especially this year of all years. (I’m getting married and the money coming in seems destined for everywhere and everything except my savings.) Instead, I’ll have to put a dent in the RRSP bucket over time by gradually increasing my personal savings rate. First thing’s first: Reinvest the tax refund cheque back into the RRSP. It’s a head start if I’ve ever seen one. And I’m on my way…

• Cash out your non-registered investments and use them to pay off your mortgage.
• Get a line of credit secured against your house for $100,000, then buy back the investments. Ask a tax pro about limits on repurchase timelines.
• Loans on investments are tax-deductible, so you can write off your interest each year. If you’re paying 3.5% on the loan, you can deduct up to $3,500 of interest annually, saving about $1,154 if you’re in the 30% tax bracket. Each year the loan is held, you can claim a deduction. Make sure your investment return exceeds the cost of your loan. We recommend you consult a professional for help with this type of strategy.

—Ursula and Joe B., Pickering , Ont.

A: You aren’t required to file a U.S. tax return. But like wearing sunscreen on the beach in Sarasota, it could be in your best interest. Filing a return may help you get some withholding tax back, says Dean Paley, an accountant and financial planner in Burlington, Ont. “Gross rents are subject to a 30% U.S. withholding tax,” he explains. “Your tenants are required to withhold and remit this tax regardless of their nationality.”

You can claim expenses such as property taxes, condo and management fees, utilities and interest—pretty much all the things rental property owners can claim here. In addition, the U.S. provides a mandatory deduction for depreciation. So while you’ll be taxed on the remaining income, Paley says, “if the tax calculated is less than the amount withheld, you will get a refund.”

If, for some reason, your tenants do not withhold and remit the tax, you have no choice but to file a U.S. return. Once you file that first tax return, you will be required to file a 1040NR in all future years for as long as you own that property.

Bruce Sellery is a frequent guest on financial television shows and author of Moolala. Do you have your own personal question? Write to Bruce at ask@moneysense.ca.

1. Ask your adviser to switch you to “F-series” mutual funds, which do not include payments to advisers. Instead of having 2.5% deducted from your returns, the fee is reduced to 1.5%.
2. Your adviser’s 1% compensation is then charged to your account directly, so he or she gets paid the same.
3. However, now you can write off the 1% as an advisory or investment counselling fee. On a $100,000 non-registered portfolio, you’ll reduce your taxable income by $1,000 every year, saving you $400 if you’re in the 40% tax bracket.

• Business-related meals and entertainment
• Mortgage interest or rent
• Heat, hydro, phone and internet bills
• Home cleaning supplies
• Property taxes
• Auto expenses
• Office equipment and supplies, including computers, laptops, etc.