What is income tax splitting? And how can it reduce your tax?
There are several tax benefits to being part of either a married or common-law couple. These include taking advantage of the spousal tax credit and pooling your charitable donations and medical expenses to receive a larger tax credit.
Another key advantage of having a domestic partner is income tax splitting. Its goal is to spread the income of the higher-earning spouse to the lower-earning spouse, to reduce the couple’s overall tax obligations (though if both spouses earn roughly the same income, it’s not worthwhile).