There are two types of tax credits
Non-refundable tax rebates can reduce the amount of tax you owe; for example, you can get a tax bonus on gifts and donations
Refundable tax rebates can reduce the amount of tax you owe but are also available if you don’t owe any taxes, such as Ontario Energy and Property Tax Credit.
The benefits can help with various living costs, such as child-rearing, housing, loss of income, and health care costs
No exceptions for age or occupation
Whether you are 9 or 90, age has no effect on your tax return. If you meet any of the above requirements, CRA expects to receive a tax return from you.
Students are also not exempt from submitting. If your 20-year-old is an entrepreneur who earned over $ 3,500 (after expenses) running a small business last summer, he or she must file a tax return while still in school. All working children should file a tax return as soon as they start earning.
Alternative Minimum Tax (AMT)
In addition to the normal tax calculation, individuals are required to calculate adjusted taxable income and include certain “tax preference” elements that are otherwise deductible or exempted in the calculation of regular taxable income. The taxpayer then pays whatever is higher of the current tax or AMT. Taxpayers who’re required to pay the AMT are entitled to credit in future years when their regular tax liability exceeds the AMT level for that year. If the adjusted taxable income goes above the minimum tax exemption of CAD 40,000, a combined federal and provincial/territorial rate of approximately 25% will be applied to the excess, resulting in AMT.
Tax on children
A minor who receives a certain passive income under an income-sharing agreement is taxed at the highest combined federal/provincial marginal rate (i.e., up to 54%), called the “child tax.” Personal tax relief other than dividends, disability, and foreign tax relief or other deductions cannot be applied to reduce child tax.
Information on income tax
You can pay taxes on your income.
The amount you pay depends on the income you earn per year. You can reduce or eliminate the amount of income tax you have to pay by applying for tax credits and certain expenses. For example, a basic personal amount, a non-refundable tax credit, allows each Canadian resident to earn more than $ 10,000 per year before income tax is due.
How income tax works
Federal and Ontario income taxes are paid to the Canadian Tax Agency (CRA), which is part of the federal government.
Income tax is usually deducted from the employer’s salary or pension and sent directly to the CRA. You may need to calculate the tax due and submit a CRA payment.
You must file a tax return with the CRA every year for:
- Declare the income earned
- Make sure you pay the correct amount of income tax
- Access to tax credits and concessions
Why do I need a personal tax accountant in Toronto?
Filing your taxes on time is necessary for many reasons. For instance, if a student wants to apply for a loan at their university then they need information from their tax returns and that of either the parent or spouse in order to complete the application process.
File your taxes early to get a head-start on the filing process. This will give you time to access all of this essential information and also lets you pocket that tax refund earlier than everyone else!
A personal tax accountant in Toronto is a great way to save both time and money. You can avoid wasting hours of your precious free time on trying to figure out all the minutiae about taxes, while an expert does that for you. At the same time, they will tell you about any potential savings or deductions which might be available based on your income so as not miss any tips before filing those returns at year’s end!
