For most Canadians – certainly most Canadians who earn their income through employment – the payment of income tax throughout the year is an automatic and largely invisible process, requiring no particular action on the part of the employee. Federal and provincial income taxes, along with Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums, are deducted from each employee’s income and the amount deposited to an employee’s bank account is the net amount remaining after such taxes, contributions, and premiums are deducted and remitted on the employee’s behalf to the Canada Revenue Agency (CRA). While no one likes having to pay taxes, having those taxes paid “off the top” in such an automatic way is, relatively speaking, painless.
As everyone knows, the Canadian tax system is a complex one, and that complexity is reflected on the annual tax return filed by individual Canadian taxpayers.
The T1 Individual Income Tax Return itself is only four pages long, but the information on those four pages is supported by 13 supplementary federal schedules, dealing with everything from the calculation of capital gains to determining required Canada Pension Plan contributions by self-employed taxpayers.
If an employee has insurable employment, Employment Insurance premiums are deducted from their insurable earnings.
The Employment Insurance premium rate for 2017 is 1.63%. This percentage is taken from each paycheque.
Ontario corporations are expected to maintain specific records and books under the Ontario Business Corporations Act (OBCA). This includes articles and by-laws, shareholder agreements, meeting minutes and registers of directors and corporate securities. Excluded from these records, is a registry of real property ownerships held by the corporations.
While this record is often maintained informally by Ontario corporations, new laws are now making it mandatory.
At the end of last year, new land registration requirements were set forth for Ontario corporations, under the OBCA.
The Canada Pension Plan (CPP) provides income to CPP contributors and their families in the case of retirement or disability.
Working Canadians contribute a percentage of their pensionable earnings to CPP every year. The amount of those earnings is, however, capped by a figure known as the maximum pensionable earning amount, and contributions on income amounts over that cap are not permitted.
By knowing what tax credits are available to you at the beginning of the year, you can create a more effective tax plan.
Dollar amounts on which individual non-refundable federal tax credits for 2017 are based, and the actual tax credit claimable, are as follows.
Each new tax year brings with it a new list of tax payment and filing deadlines, as well as some changes with respect to tax planning strategies. Some of the more significant dates and changes for individual taxpayers for 2017 are listed below.
Planning for – or even thinking about – 2017 taxes before the New Year has even been rung in may seem more than a little premature. However, most Canadians will start paying their taxes for 2017 with the first paycheque they receive in January, and it is worth taking a bit of time to make sure that things start off – and stay – on the right foot.
