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"tax withheld" in return does not equal the sum of the three "tax withheld" in the interview.


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I am doing a joint return for myself and my wife. She has OAS, CPP, and pension income, all with  taxes withheld. If I add up the amount of taxes withheld, it is 430 dollars higher than the amount reported on line 437...  How can that be? The program did some pension splitting... does it split tax paid, as well???

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In its calculations, the program takes into account the rules governing pension income splitting. It considers all the factors involved to determine the optimal amount of pension income to be transferred to the other spouse.

 

You can modify the pension split by following these steps:

 

1- In the "QuikClik Navigator", on the left-hand side of the screen, select "Pension income, T4A, split pension".

 

2- On the page to your right, choose the last line "Split pension income with your spouse".

 

3- For the line "Do you wish to split eligible pension income with your spouse?", from the drop-down menu on your left, choose the option that suits you best among the following three:

 

A- Let MaxBack decide.

 

B- Transfer to spouse (you must specify the amount that you transfer).

 

C- Do not transfer to the spouse.

 

If you look at Step 5 of the T1032 form, you will notice that the system also indicates the split of deducted income tax. For Quebec residents, also note that the provincial and federal rules for income splitting are different.

 

Moreover, under the "Tax return" tab, you will find a document entitled "Report on split-pension income". By reviewing this report, you will be able to determine which one of the possible pension income splitting scenarios is the most beneficial for your couple.

 

For more information regarding pension income splitting, please consult the following links:

 

For the CRA:

 

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/pnsn-splt/menu-eng.html

 

For Revenu Québec:

 

http://www.revenuquebec.ca/en/citoyen/impots/guide/aideligne/revenu-total/ligne123.aspx

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