Frequently Asked Questions

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What are the various Income Tax Rates in Canada?
The combined 2020 Marginal Tax Rates in Ontario are:

2020 Marginal Tax Rates

Combined Federal and Ontario

2020 Taxable Income Employment Income , Pension Income, Interest Income Capital Gains Dividends
Eligible Non-Eligible
first 44,740 20.05% 10.03% -6.86% 9.24%
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%
over $220,000 53.53% 26.76% 39.34% 47.74%
How is retirement income taxed in Canada?

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.

How long should we keep income tax records in Canada?

You are required to retain all tax documents and related receipts for 6 years.

How long does it take to receive a Canada tax refund?

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.

How much capital gains tax on rental property in Canada?

Capital Gains are taxed at half the rate of employment income. Please see 2020 Marginal Tax Rates.

How much of my salary is taxed in Canada?
How much tax does a small business pay in Canada?

The NET INCOME of Proprietorships (Revenues minus tax deductible expenses) are taxed at the same rate as employment expenses. See 2020 Marginal Tax Rates.

How soon can I file my taxes in Canada?

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.

How to check my tax return status online in Canada?
How to claim work expenses on taxes Canada?

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.

How to file taxes for a deceased person in Canada?

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

What happens to my tax bill if I pay late?

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.

What is a notice of assessment?

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.

As a business owner and sole proprietor, what form do I fill out to report my income and expenses?

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

I am a senior, can I split my income with my spouse?

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.

How does child care tax credit work in Canada?

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.

How long does it take for you to a tax return?

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.

Whether you need personal or small business taxes, we KNOW what you need! Contact us