Have extra RRSP room (and a spouse)? Try setting up a spousal RRSP account and make contributions to it in the name of your lower-earning partner. You’ll get the same advantage as if you were putting income into your own RRSP (a tax refund on contributions), but here’s the kicker: when the money is later withdrawn, it will be taxed in your lower-income spouse’s hands at a lower rate. Just be aware of the Canada Revenue Agency’s attribution rules: you can’t make a contribution in the same year you withdraw the money, or in either of the two previous tax years. Plus, the total combined contributions to your own RRSP and your spouse’s RRSP cannot exceed your own deduction limit.
Tax savings Take, for example, Alberta couple Joey, an oil sands worker earning $105,000 per year, and Claudia, a stay-at-home mom with no income. If Joey deposits $10,000 into a spousal RRSP for Claudia and leaves it there for three years, he’ll save $3,600 in taxes, because when the money is withdrawn it will be taxed at her lower marginal rate.