The 2007 Federal Conservative budget has given all taxpayers the opportunity for substantial tax savings this year, especially our seniors, sai Gerry Labelle, the new Conservative Party candidate for Sudbury, at press conference Thursday morning at the Parkside Centre.
With tax season upon Ontarians, Labelle wanted to get the message about pension splitting out to the seniors in the community as they prepare their income tax returns, in order for them to understand how the benefit works and get the maximum return.
“This plan is intended to maximize their benefits, thus retaining millions of dollars in taxes in our community,” he said. “I want to ensure absolutely no one misses out on this opportunity to retain tax dollars in their pockets.”
Fred Slade, a certified accountant, joined Labelle at the press conference and explained how the pension splitting concept will work.
For married or common-law couples where one income is significantly higher than the other, more tax is payable than if the income could be taxed more evenly between the two.
“This is the case for many seniors in our region,” he said, though he wouldn't make an estimate of the number of seniors who are eligible. “While we can't be certain how many will benefit, (we) don't want anyone to miss out.”
Less income tax will be paid by the couple, and in some cases, a very substantial amount less, Labelle added. “It provides the couple the opportunity to keep more of their pension income, which they have worked so hard to create.”
Up to 50 percent of eligible pension income can be transferred to a partner, including annuity payments from a registered plan (if over 65), annuity payments from RRSPs and DASPs, and all payments from RRIFs.
“Not only will Sudbury's seniors benefit from having their income taxed at a lower rate, but they can double up the $2,000 pension credit, possibly reducing or eliminating clawbacks to their OAS payments, and age amount credits,” Labelle said. “The potential benefits are very significant.”
Though the process could potentially be done independently, Slade advised seniors to seek the expertise of tax preparation professionals, in order to maximize their savings and receive their full benefits.
More information is available online at the Canadian Revenue Agency's website, www.cra-arc.gc.ca. Tax preparation clinics are also held in conjunction with the United Way. Further information is available by calling 669-1494.
