There’s no denying that the Canadian tax system is complex, even for individuals with relatively straightforward tax and financial circumstances. As well, significant costs can follow if a taxpayer gets it wrong when filing the annual tax return. Sometimes those costs are measured in the amount of time needed to straighten out the consequences of mistakes made on the annual return; in a worst-case scenario, they can involve financial costs in the form of interest charges or even penalties levied for a failure to remit taxes payable on time or in the right amount.
Newsletter - Page 29 of 31 - Akler Browning LLP
Latest news and regulations from the financial world.
The Employment Insurance premium rate for 2020 is decreased to 1.58%.
The Quebec Pension Plan contribution rate for employees and employers for 2020 is 5.7%, and maximum pensionable earnings are $58,700. The basic exemption is $3,500.
The Canada Pension Plan contribution rate for 2020 is increased to 5.25% of pensionable earnings for the year.
Dollar amounts on which individual non-refundable federal tax credits for 2020 are based, and the actual tax credit claimable, will be as follows:
The indexing factor for federal tax credits and brackets for 2019 is 1.9%. The following federal tax rates and brackets will be in effect for individuals for the 2020 tax year:
Each new tax year brings with it a listing 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 2020 are listed below.
The general corporate income tax rate will decrease from 11% to 10%, effective January 1, 2020.
While Canadians benefit from a publicly funded health care system, there are nonetheless a large, and increasing, number of medical expenses which are not covered by provincial health care plans. As well, with the rise in part-time positions and contract work — the “gig” economy — an increasing number of Canadians do not enjoy coverage for such costs through employer-sponsored private insurance. In those situations, Canadians have to pay for such unavoidable expenditures, including dental care, prescription drugs, ambulance trips, and many other para-medical services, like physiotherapy, on an out-of-pocket basis.
Between now and the end of February 2020, Canadians will receive a variety of receipts for expenditures made during the 2019 taxation year. Some of those expenditure receipts will support a tax deduction or credit claim to be made by the recipient on his or her 2019 tax return, while others will not. And, it’s not always easy for a taxpayer to know when such a credit or deduction is or is not available to be claimed. While the Canadian individual income tax return is only four pages long, 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.