2020 Marginal Tax Rates
Combined Federal and Ontario
|2020 Taxable Income||Employment Income , Pension Income, Interest Income||Capital Gains||Dividends|
|over $44,740 up to $48,535||24.15%||12.08%||-1.20%||13.95%|
|over $48,535 up to $78,783||29.65%||14.83%||6.39%||20.28%|
|over $78,783 up to $89,482||31.48%||15.74%||8.92%||22.38%|
|over $89,483 up to $92,825||33.89%||16.95%||12.24%||25.16%|
|over $92,825 up to $97,069||37.91%||18.95%||17.79%||29.78%|
|over $97,069 up to $150,000||43.41%||21.70%||25.38%||36.10%|
|over $150,000 up to $150,473||44.97%||22.48%||27.53%||37.90%|
|over $150,473 up to $214,368||48.19%||24.09%||31.97%||41.60%|
|over $214,368 up to $220,000||51.97%||25.98%||37.19%||45.95%|
Retirement Income is taxed at the same rate as employment income. There is a Pension Credit of $2,000 per year which reduces the tax payable.
You are required to retain all tax documents and related receipts for 6 years.
Typically, CRA issues refunds within 10 days of e-filing. You should set up direct deposit with CRA to ensure fast receipt of the refund.
Capital Gains are taxed at half the rate of employment income. Please see 2020 Marginal Tax Rates.
The NET INCOME of Proprietorships (Revenues minus tax deductible expenses) are taxed at the same rate as employment expenses. See 2020 Marginal Tax Rates.
CRA starts accepting tax returns in late February for the previous tax year. Personal tax returns my be filed by April 30th to avoid penalties.
You need to register for CRA’s My Account at https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/account-individuals.html
Your employer needs to fill out and give you a copy of the T2200 Conditions of Employment – https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t2200/t2200-fill-15e.pdf
Once you have the form, then you need to fill out the Worksheet for Employment Expenses – https://bptax.ca/wp-content/uploads/2017/07/1.c.WORKSHEET-EMPLOYMENT-EXPENSES-T2200-1.pdf
We will then take that information and claim the expenses on your personal tax return.
There are special rules with regards to the filing of a final tax return and depending on the complexities there may be a T3 Estate Return required. Please see https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4011/preparing-returns-deceased-persons-2016.html
The best thing you can do to avoid penalties and interest is to file your returns on time (before April 30th). When you file late CRA adds penalties which can add up to 25% of your taxes owing.
A Notice of Assessment is CRA’s statement showing the tax return that you have e-filed. This is a very important document so you should keep it in a file. When you decide to buy a house and apply for a mortgage, the first thing the mortgage broker will ask for is your most recent Notices of Assessment.
You need to file your income and expenses on the T2125 form using our worksheet – https://bptax.ca/wp-content/uploads/2017/07/1.AAA_.WORKSHEET-FOR-SMALL-BUSINESSES.pdf
Yes, CRA allows you to split up to 50% of your pension income with your spouse. Our software, automatically optimizes the best % to minimize your family’s income tax.
Childcare expenses are deductible by the lower income earner and is limited to 2/3rds of their earned income and limited to $11,000 per year for children born in 2019 and $8,000 for children born from 2013 to 2018.
We work on a 1 to 2 week turnaround. If you drop off your tax information this week, it will be ready for your review and signature next week.