Income splitting debate - MoneySense

Income splitting debate

Economist Jack Mintz says the tax system is unfair to families where one parent stays at home.

  • Canada’s current income tax system is unfair to families where one parent stays at home, argues economist Jack Mintz in a new report for the School of Public Policy think-tank. Mintz wants the system to calculate total family household income, instead of each individual’s income. Under the current system, families where one spouse earns more than the other get taxed at a higher rate than families where two working partners earn the same total income split evenly between two paycheques. In fact, single-earner family taking in $120,000 a year pays the same income tax as a dual-earning couple making $141,000. For the time being however, income splitting is only possible in retirement and non-pensioners should file their individual income tax returns by April 30 to avoid potential penalties.
  • Did you know that your home may not be insured under your regular policy during home renovations? “Upgrades requiring extensive work, such as adding an extension to your home, may require you to change your entire policy to a building under construction,” TD Insurance’s Dave Minor said in a release Monday. “And, if you’re not living in your home during renovations, it becomes an easier target for thieves and undetected water damage, which is why your insurer may require you to secure a vacancy permit if you move out for more than a month.” TD also recommends asking to see your builder’s public liability insurance certificate since you could be on the hook for their medical bills, lost wages, or damages for pain and suffering if they’re injured on the job.
  • A new RBC survey has found that 60% of Canadians admit to making at least one rookie mistake when it came to buying their first home. A bank infographic illustrates with examples: