Q: Changes to the 2016 Budget have eliminated income splitting – are there any other similar tools available that I can take advantage of?
A: A spousal RRSP is a great income splitting tool. If you earn significantly more than your spouse or common law partner, you can contribute to a RRSP in your spouse’s name, and claim the tax deduction in the higher tax bracket. The spouse with the lower income can withdraw from the RRSP and pay less tax for being in the lower tax bracket. Seniors can also benefit. You can still contribute to a spousal RRSP if you’re older than 69 if you have contribution room and if your spouse is younger than 69.