Here is a Tuesday Quickie for you, I have pointed this one out a few times, but my Theory has been proven:
Whenever you have a major change in your life that causes a change in your tax status, the CRA will ask for you to send receipts to verify it (i.e. a Review not an audit).
A simple theory, but it has been proven countless times for me:
- Each time one of my kids started at University, either I or my child was asked to supply T2202A forms from the school.
- When they moved from residence to a rental off campus, receipts for the rental
- When I claimed my son’s school fees as a medical expense.
- My middle daughter has just started a Chiropractic College, and the tuition fees are MUCH higher, thus the CRA wants receipts.
It’s not a big thing, and fairly easy to remedy, just keep this in mind, and keep those receipts.
Saw that question in Money Magazine as a frequently asked question, so let me help you out (for those in Canada), with a few helpful links and a few more helpful tables and such. As a precursor to these hints, you should always check with the CRA or a licensed Tax Accountant if you have questions about your Tax levels and such.
Where do you find out about the current Federal Income Tax Rates (for you as an Individual, not you as a corporation) ? Go to this page for individuals. That page will tell you the following (for 2015):
Federal tax rates for 2015
- 15% on the first $44,701 of taxable income, +
- 22% on the next $44,700 of taxable income (on the portion of taxable income over $44,701 up to $89,401),+
- 26% on the next $49,185 of taxable income (on the portion of taxable income over $89,401 up to $138,586), +
- 29% of taxable income over $138,586.
The Infamous Bad Pun
Remember that is Taxable Income, so this is what is left after you have taken your deductions, and credits and such. Remember also that if you earn less than the Basic Personal Amount (line 300) you don’t have to pay taxes (for kids with summer jobs and such).
However, that is not all, remember that you have Provincial Income Tax as well, and here are the 2015 numbers to keep in mind too:
Provincial/territorial tax rates (combined chart)
|Newfoundland and Labrador
||7.7% on the first $35,008 of taxable income, +
12.5% on the next $35,007, +
13.3% on the amount over $70,015
|Prince Edward Island
||9.8% on the first $31,984 of taxable income, +
13.8% on the next $31,985, +
16.7% on the amount over $63,969
||8.79% on the first $29,590 of taxable income, +
14.95% on the next $29,590, +
16.67% on the next $33,820, +
17.5% on the next $57,000, +
21% on the amount over $150,000
||9.68% on the first $39,973 of taxable income, +
14.82% on the next $39,973, +
16.52% on the next $50,029, +
17.84% on the amount over $129,975
||Go to Income tax rates (Revenu Québec Web site).
||5.05% on the first $40,922 of taxable income, +
9.15% on the next $40,925, +
11.16% on the next $68,153, +
12.16% on the next $70,000, +
13.16 % on the amount over $220,000
||10.8% on the first $31,000 of taxable income, +
12.75% on the next $36,000, +
17.4% on the amount over $67,000
||11% on the first $44,028 of taxable income, +
13% on the next $81,767, +
15% on the amount over $125,795
||10% of taxable income
||5.06% on the first $37,869 of taxable income, +
7.7% on the next $37,871, +
10.5% on the next $11,218, +
12.29% on the next $18,634, +
14.7% on the next $45,458, +
16.8% on the amount over $151,050
||7.04% on the first $44,701 of taxable income, +
9.68% on the next $44,700, +
11.44% on the next $49,185, +
12.76% on the amount over $138,586
||5.9% on the first $40,484 of taxable income, +
8.6% on the next $40,487, +
12.2% on the next $50,670, +
14.05% on the amount over $131,641
||4% on the first $42,622 of taxable income, +
7% on the next $42,621, +
9% on the next $53,343, +
11.5% on the amount over $138,586
A commenter has pointed out another excellent resource in this area TaxTips.ca , check them out too!
Tax Deadline is not today (for 2015) thanks to a badly phrased set of instructions, the CRA has extended the deadline for 2015 to May 5th, so you have a whole weekend to finish, and thus many less reasons to not do your taxes (i.e. I don’t have the time).
You need help with your taxes you say? Well, here is a veritable treasure trove of useful articles by me to help you out with your tax preparation this year (don’t say I didn’t try to help):
Just a Little More Time for Your Taxes
You have the whole weekend to finish this, go get Turbotax, H&R Blocks Software, Ufile or whatever program you wish and get it done!
For all of those who have not finished their taxes (in Canada) yet (April 30th deadline looms large), I would like to give you some of the excellent (what is the font for sarcasm) excuses that I have heard over the past years from friends and co-workers. (maybe you should read Myths About Your Taxes before you read this great list, just to make sure you are sure you don’t want to do your taxes):
Really, that is your excuse?
Photo courtesy Forbes
- I don’t owe money, so I just couldn’t be bothered.
Question: How do you know that you don’t owe any tax if you haven’t done your return?
- My taxes are simple, so I am sure I don’t owe any money, so why bother ?
Question: What if they owe you money? Don’t care? Want to send money to the “Send Big Cajun Man on Vacation fund”, if money means so little to you?
- If I owe money, the CRA will tell me, soon enough
Statement: WTF? Yes, and the CRA will also impose their penalties starting May 1st (or earlier) if you owe them money.
- I might do it wrong, then the CRA will get mad at me
Comment: The CRA might get mad at you, but my guess is their penalties won’t come into play, if you submitted your forms on time (although they may make you redo it, correctly)
- I am on a worldwide cruise and can’t submit my taxes until I get back in September
Comment: CRA’s answer might be, “Maybe you should have thought about this before you went away?”
- The CRA always extends the deadline, so I don’t have to rush
Comment: What if they don’t? (see penalties comment previously)
- The dog ate my tax receipts!
Comment: Get a new dog?
- The dog at my computer?
Comment: Umm…. next?
- I didn’t submit my taxes last year, and they didn’t bother me, why should I bother this year? (repeat that excuse for 6 years)
Question: You enjoy loaning money to the Government? You most likely are owed money, but the CRA doesn’t need to tell you that, do they?
Any other great excuses out there about not doing your taxes on time, that I might have missed? I guess with these great excuses you won’t need to Search For a Good Tax Preparer either?
Disclaimer: This article neither condones, nor espouses any of these lame excuses, do your taxes on time!
As the tax deadline looms on the horizon, I felt folks might need a few helpful hints on how to choose the right tax preparer for you, or maybe more accurately, which tax preparers not to choose (especially if you are in a rush, the wrong decision here could end up being quite costly for you).
An Accountant with a Sense of Humor?
Image courtesy of iosphere at FreeDigitalPhotos.net
If your prospective tax preparer has any of the following problems or character flaws, don’t choose them to prepare your taxes:
- If they say that they are not very good with numbers, but that doesn’t matter much with taxes, run away from them very quickly
- Should they mention in passing that it was nice of you to drop by, as they just got out of prison for fraud, you might not want to choose them to prepare your taxes, unless they are a relative. In that case invoke the, “I don’t do business with family”, clause.
- If they ask you, “Now when is the tax filing deadline this year?”, you might want to rethink hiring them, for your tax preparation needs.
- If the firm is called H&P Block that might be a dead giveaway they are trying to snare unsuspecting clients, assuming they are getting H&R Block.
- If their motto is, “Only 1/2 our clients get audit’ed, and we were out of town when that happened“, that shouldn’t give you a lot of confidence in their skills.
- A laughing accountant always worries me too, but that might just be my own experience going to school with future accountants.
- If Canadian Tire started offering Tax Preparation services while I waited for my oil change, while convenient, I would avoid that service as well.
- If they offer you an “Instant Cashback“, doesn’t that make you wonder how much more of a tax rebate they may have found for you? If you need your tax rebate that fast, you may have bigger problems than you think (financially).
Just a few helpful hints on who to avoid as your tax preparer for this year.