I was just tinkering with donations that had already been optimized in a spousal file, at first only because I wanted to get both taxpayers into a refund position, but I noticed that as I did, the family refund total was rising.
I got to a point where the taxpayers had an absolute tax savings of $415 vs. the “optimized” amount.
With TaxCycle’s “optimized” transfer, the entire claim was put on one taxpayer’s return, and they no longer had any provincial taxes payable (i.e. non-refundable credits were exceeding AB tax on taxable income due to the donations). With my manual transfer, both spouses still have provincial taxes payable for the donations to grind against, resulting in the savings.
Am I expecting too much of the optimization here? I was assuming that it was considering partial transfers, but perhaps it’s only determining which spouse would be better off claiming the entire sum? If this is true, I really think it should be made more clear what the limitations of the optimizations are.
Perhaps in the short term a review message could flag this issue where a taxpayer is claiming all donations but no longer has provincial taxes payable?