In 2014, the Ontario Personal Income Tax Brackets and Tax Rates Before Surtax were increased by an indexation factor of 1.010. Additionally, the Federal Tax Brackets and Tax Rates including Surtaxes were increased by an indexation factor of 1.009. This is great news for everyone because it means that you may be eligible for a lower tax bracket. We all know that lower tax brackets mean that you get to take home more money. Unfortunately, this increase may not significantly alter everyone’s financial situation, but it is something that all tax payers should be aware of.
On the first $43,954 your taxable income, you will be taxed 15 per cent. Additionally, on the next $43,954 (on the portion of taxable income over $43,953 up to $87,907), you will be taxed 22%. On top of this amount, you will be taxed 26% on the next $48,363 of taxable income ($87,907 up to $136,270). Finally, if you bring home a taxable income over $136,270, you will be taxed an additional 26%.
Remember that tax for all provinces (except Quebec) and territories is calculated in the same way as federal tax. Please see the chart below (as it pertains to your province) to gain a clearer understanding regarding the calculation of your income tax:
* Residents in Alberta must adhere to a rate of 10% on their taxable income.Clearly, these taxes add up quickly and can leave many Canadians feeling stressed out during tax time. This is especially true when the stress of a significant payout is compounded by confusion regarding the taxation process.
If you would like to learn more about federal and provincial tax brackets, visit http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html, or contact a trusted accounting professional at Hogg, Shain & Scheck. Year after year, we help our clients in the Greater Toronto Area to successfully file their taxes. Our accountants are well versed in the processes that may save you money, or at the very least, protect you from a financial audit.Come tax season, you want to be fully prepared and informed.
Don’t let a lack of understanding or financial strategy compromise your accumulated wealth. Don’t hesitate to take the very simple step that may save you a great deal of hassle in the long run. Learn more about our tax services or speak to one of our accounting professionals today, and see what a second opinion can mean to your bank account.