HAVE YOUR
PERSONAL TAX RETURN FILED BY A
CERTIFIED GENERAL ACCOUNTANT
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While Tax facts and
figures provide a wealth of information, it is not meant to be
all-encompassing, and should not be used as a sole basis for specific action.
Seeking professional advice is always prudent when making or considering
significant decisions.
An RRSP is a savings contract registered with the CCRA between you and a
financial institution such as a bank, trust company, credit union, or life
insurance company. Your contributions, and the income they earn, compound
tax-free while sheltered in the RRSP. Thus you accumulate a larger
investment fund. Investment decisions can be made by you through a
self-directed RRSP.
Registered retirement savings plan limits will increase as follows.
|
YEAR |
RRSP (1) |
Income Level (2) |
|
2008 |
$20,000 |
$111,112 |
|
2009 |
$21,000 |
$116,667 |
|
2010 |
$22,000 |
$122,223 |
The amount that
can be contributed in a year is limited by:
1.
RRSP Contribution
Limit for a year is the lesser of the dollar limit for that year and 18% of the
prior year’s earned income, less any pension adjustment for the prior year.
2.
Earned income
needed in prior year for maximum contribution.
The
table shows the combined federal and provincial marginal tax rates – the
percentage of tax you pay on your last dollar of income, or on additional
income.
|
Income Bracket |
Marginal |
Marginal |
Marginal Income |
|
Tax Year 2010 |
|
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|
$0 to
$10,382 |
0.00% |
0.00% |
0.00% |
|
$10,383
to $11,000 |
15.00% |
0.00% |
15.00% |
|
$11,001
to $35,859 |
15.00% |
5.06% |
20.06% |
|
$35,860
to $40,970 |
15.00% |
7.70% |
22.70% |
|
$40,971
to $71,719 |
22.00% |
7.70% |
29.70% |
|
$71,720
to $81,941 |
22.00% |
10.50% |
32.50% |
|
$81,942
to $82,342 |
26.00% |
10.50% |
36.50% |
|
$82,343
to $99,987 |
26.00% |
12.29% |
38.29% |
|
$99,988
to $127,021 |
26.00% |
14.70% |
40.70% |
|
$127,022
& Over |
29.00% |
14.70% |
43.70% |
|
Income Bracket |
Marginal |
Marginal |
Marginal Income |
|
Tax Year 2009 |
|
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$0 to
$9,373 |
0.00% |
0.00% |
0.00% |
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$9,373
to $10,320 |
0.00% |
5.06% |
5.06% |
|
$10,321
to $35,716 |
15.00% |
5.06% |
20.06% |
|
$35,717
to $40,726 |
15.00% |
7.70% |
22.70% |
|
$40,726
to $71,433 |
22.00% |
7.70% |
29.70% |
|
$71,434
to $81,452 |
22.00% |
10.50% |
32.50% |
|
$81,453
to $82,014 |
26.00% |
10.50% |
36.50% |
|
$82,014
to $99,588 |
26.00% |
12.29% |
38.29% |
|
$99,589
to $126,264 |
26.00% |
14.70% |
40.70% |
|
$126,265
& Over |
29.00% |
14.70% |
43.70% |
|
Income Bracket |
Marginal |
Marginal |
Marginal Income |
|
Tax Year 2008 |
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$0 to
$9,189 |
0.00% |
0.00% |
0.00% |
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$9,189
to $9,600 |
0.00% |
5.24% |
5.24% |
|
$9,601
to $35,016 |
15.00% |
5.24% |
20.24% |
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$35,017
to $37,885 |
15.00% |
7.98% |
22.98% |
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$37,886
to $70,003 |
22.00% |
7.98% |
29.98% |
|
$70,004
to $75,769 |
22.00% |
10.50% |
32.50% |
|
$75,770
to $80,406 |
26.00% |
10.50% |
36.50% |
|
$80,407
to $97,636 |
26.00% |
12.29% |
38.29% |
|
$97,637
to $123,184 |
26.00% |
14.70% |
40.70% |
|
$123,184
& Over |
29.00% |
14.70% |
43.70% |
All
credits are non-refundable unless otherwise noted. Non-refundable credits reduce or eliminate
tax. Unless there is tax liability they have no value.
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Federal Amounts |
Federal Credit |
BC |
BC Credit |
|
General factor
|
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15% |
|
5.06% |
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Charitable donations:
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15% 29% |
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5.06% 14.70% |
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Non-eligible dividend tax
credit:
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13.33% |
|
4.20% |
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Eligible dividend tax credit:
|
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18.97% |
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11% |
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Basic |
$10,320 |
$1,548 |
$9,373 |
$474 |
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Spouse and equivalent to spouse |
$10,320 |
$1,548 |
$8,026 |
$406 |
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Child |
$2,089 |
$300 |
- |
- |
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Age 65 |
$6,408 |
$961 |
$4,203 |
$213 |
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Disability
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$7,196 $4,198 |
$1,079 $630 |
$7,030 $4,101 |
$356 $208 |
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Infirm dependant – age 18 and over |
$4,198 |
$630 |
$4,101 |
$208 |
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Adoption |
$10,909 |
$1,636 |
10,909 |
$552 |
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Children’s fitness |
$500 |
$75 |
- |
- |
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Caregiver |
$4,198 |
$630 |
$4,101 |
$208 |
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Pension income |
$2,000 |
$300 |
$1,008 |
$51 |
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CPP |
$2,119 |
$318 |
$2,115 |
$107 |
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Employment insurance (EI) |
$732 |
$110 |
$731 |
$37 |
|
Canada employment |
$1,044 |
$157 |
- |
- |
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Education and textbook (per month)
|
$465 $140 |
$70 $21 |
$200 $57 |
$10 $3 |
Personal
tax credits for other provinces and territories can be found at the following CCRA Website
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Active
Business Income up to $400,000 |
Investment Income |
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Federal rate (before deductions) |
38.00% |
38.00% |
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Deductions
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-17.00% -10.00% N/A |
N/A -10.00% 6.67% |
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Federal rate |
11.00% |
34.67% |
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Prov |
Fed+ Prov |
Prov |
Fed+ Prov |
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Provincial rate |
2.50% |
13.50% |
11.00% |
45.67% |
Federal Small Business Limit
Federal
small business rates apply only to the first $400,000 of active business income
earned in Canada by associated CCPC’s. The $400,000 limit is reduced on a straight-line
basis for CCPC’s that, in the preceding year, had taxable capital employed in
Canada between $10 million and $15 million.
This claw back applies to all provincial and territorial small business
deductions except Ontario.
For all
taxpayers, half of capital gains, net of capital losses, must be included in
income.
Some
individuals benefit from a $500,000 cumulative lifetime capital gains exemption
for disposition of qualifying small business corporation shares or qualified
farm property.
Individuals
can defer tax on all or a portion of capital gains realized on the sale of
eligible small business investments if the proceeds are reinvested in other
small business investments.
Before
February 19, 2003, the deferral was available only on investments of up to
$2,000,000. This limit is eliminated for disposition made after February 18,
2003.
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2007 |
2008 |
2009 |
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Maximum pensionable earnings |
$43,700 |
$44,900 |
46,300 |
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- Basic exemption |
$3,500 |
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= Maximum contributory earnings |
$40,200 |
$41,400 |
42,800 |
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Employer/employee rate |
4.95% |
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Maximum employer/employee
contribution |
$1,990 |
$2,049 |
$2,119 |
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Self-employed contribution rate |
9.9% |
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Maximum self-employed
contribution (note 1) |
$3,980 |
$4,099 |
$4,237 |
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EI PREMIUMS |
Maximum annual insurable
earnings |
$40,000 |
$41,100 |
$42,300 |
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Premium
rate per $100 insurable earnings
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Annual
maximum contribution
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Note 1:
Self-employed
individuals are permitted to deduct half of CPP premiums paid for their own
coverage. The non-deductible half
qualifies for a tax credit.
Self-employed individuals do not pay EI premiums.
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2008 Prescribed rates |
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Deduction limits |
Owned cars |
Maximum capital cost on which
capital cost allowance (CCA) can be claimed |
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Maximum monthly interest |
$300 |
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Leased cars |
Thresholds used to determine
maximum deduction for lease payments |
Lease cost limit |
$30,000
+ GST & PST |
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Monthly lease limit |
$800
+ GST & PST |
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Manufacturer’s list price limit |
$35,294
+ GST & PST |
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Automobile allowances |
Per-kilometre allowance |
Same limits as tax-exempt
allowances, below |
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Taxable Benefits |
Tax-exempt allowances |
Kilometres driven in the Yukon,
NWT, or Nunavut |
First 5,000 |
56˘ |
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Each
additional |
50˘ |
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Kilometres
driven in all other locations |
First
5,000 |
52˘ |
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Each
additional |
46˘ |
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Operating cost benefit |
Persons
employed principally in selling or leasing automobiles |
21˘ |
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All
other employees |
24˘ |
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