Income Splitting
INCOME SPLITTING
The right, created by provisions of federal tax laws, given to married couples who file joint returns to have their combined incomes subject to anincome taxat a rate equal to that which would be imposed if each had filed a separate return for one-half the amount of their combined income.
Income splitting was devised as a result of legislation enacted by Congress in 1948 to equalize the federal taxation of married couples who lived in common-law states and who paid higher taxes than couples who lived in community property states and, as a result, have the tax benefits of income splitting.
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Income Splitting