10 Tax Tips Lower Costs And Increase Income: Difference between revisions
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Revision as of 22:54, 4 February 2025
S is for SPLIT. Income splitting is a strategy that involves transferring a portion of income from someone who's in a high tax bracket to a person who is within a lower tax range. It may even be possible to reduce the tax on the transferred income to zero if this person, doesn't have other taxable income. Normally, the other person is either your spouse or common-law spouse, but it could even be your children. Whenever it is easy to transfer income to someone in a lower tax bracket, it must be done. If primary between tax rates is 20% your own family will save $200 for every $1,000 transferred towards the "lower rate" general.
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If a married couple wishes to receive the tax benefits in the EIC, they should file their taxes alongside one another. Separated couples cannot both claim their children for the EIC, so they will need decide who will claim one. You can claim the earned income credit on any 1040 tax guise.
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