Although April 30th of every year is the deadline for Canadians to file their tax returns[i] (June 15th for Self-Employed taxpayers), the Canada Revenue Agency (CRA) encourages taxpayers to start working to file their tax returns earlier to prevent filing errors as a result of last-minute rushing. Additionally, the CRA also announced February 10, 2014 as the date taxpayers may begin using ‘NETFILE’ to file their tax returns online.[ii]
The experts at AG Tax have summarized the tax rates approved in 2014 (for filing 2013 tax returns) and a few relevant tax pointers to keep in mind while preparing and filing tax returns.
2014 Federal Tax Rates
15% on taxable income up to $43,953
22% on taxable income in excess of $43,954 up to $87,907
26% on taxable income beyond $87,907 up to $136,270; and
29% of taxable income on the amount above $136,270
2014 Provincial/territorial tax rates (except Quebec)[iii]
Province/Territory
Rate(s)
Newfoundland and Labrador
7.7% on the first $34,748 of taxable income + 12.5% on the next $34,254 +13.3% on the amount over $68,508
Prince Edward Island
9.8% on the first $31,984 of taxable income + 13.8% on the next $31,985 + 16.7% on the amount over $63,969
Nova Scotia
8.79% on the first $29,590 of taxable income + 14.95% on the next $39,304 + 16.67% on the next $33,820 + 17.5% on the next $57,000 + 21% on the amount over $150,000
New Brunswick
9.68% on the first $39,305 of taxable income + 14.82% on the next $39,304 + 16.52% on the next $49,193 + 17.84% on the amount over $127,802
Ontario
5.05% on the first $40,120 of taxable income, + 9.15% on the next $40,122, + 11.16% on the next $433,848, + 13.16 % on the amount over $514,090
Manitoba
10.8% on the first $31,000 of taxable income + 12.75% on the next $36,000 +17.4% on the amount over $67,000
Saskatchewan
11% on the first $43,292 of taxable income, + 13% on the next $80,400, + 15% on the amount over $123,692
Alberta
10% of taxable income
British Columbia
5.06% on the first $37,606 of taxable income, + 7.7% on the next $37,607, + 10.5% on the next $11,141, + 12.29% on the next $18,504, + 14.7% on the next $45,142, + 16.8% on the amount over $150,000
Yukon
7.04% on the first $43,953 of taxable income, +
9.68% on the next $43,954, +
11.44% on the next $48,363, +
12.76% on the amount over $136,270
Northwest Territories
5.9% on the first $39,808 of taxable income, + 8.6% on the next $39,810, + 12.2% on the next $49,823, + 14.05% on the amount over $129,441
Nunavut
4% on the first $41,909 of taxable income, + 7% on the next $41,909, + 9% on the next $52,452, + 11.5% on the amount over $136,270
Consider Filing Online[iv]
Filing online is convenient, quick and easy: Taxpayers can now file their returns by using a computer, and will receive confirmation instantaneously.
Faster Refunds: Electronic returns are processed faster than paper ones, so if a taxpayer expects to receive a refund from the CRA, (s)he should consider filing online and utilizing the direct deposit option. Applying through the CRA portal assures that the refund will be deposited directly into the taxpayer’s account within as little as 8 days (if every associated mandatory document is in place).
Safety of Information: The CRA uses the most secure systems to ensure the safety of information disclosed to the CRA. It also removes the possibility of misplaced documents that occur with mailed tax returns.
No Effect on Audit: If income has been missed or an error has been made in the tax return, it could be subject to a CRA audit, regardless of whether the return has been filed online or on paper. It is a common misconception that filing online increases the chances of a tax audit.
File Early[v]
A delay in filing tax returns may result in an additional delay of Goods & Service Tax/Harmonized Sales Tax credit, Canada child tax benefit payments, and/or old age security benefit payments. File tax returns in time to avoid penalty and interests.
Filing early provides time to look into various CRA payment options which may help clear the tax liability in case a taxpayer does not have the money to pay off their tax dues. Every individual should consult a tax professional to figure out the right payment option based on their situation.
Retain Information[vi]
Taxpayers should keep receipts and information slips for at least six years in case the CRA has concerns regarding their tax returns.
AG Tax LLP Can Help
If you have any tax-related concerns or need assistance with tax planning or filing, please contact AG Tax. Our tax professionals are highly-experienced with U.S. and Canadian personal, corporate, and estate tax laws and can guide you with your tax situation.
Aylett Grant Tax LLP is a full service accounting firm with a dedicated team of experts, who are highly-qualified and experienced in handling situations related to U.S., Canada, and other international tax laws. We can assist with:
• Canadian Personal and Corporate tax returns
• Cross Border Taxation and Business Planning
• U.S. Personal and Corporate Taxation
• Disclosure of Foreign Assets and other information filings
• Retirement planning
• Estate Planning, Inheritance tax advice
Please contact any of our offices across Canada at 604-538-8735 (Greater Vancouver), 780-702-2732 (Edmonton and Alberta), or 416-238-5920 (Greater Toronto) to arrange for an appointment to discuss your tax related queries.
IRS Circular 230 Disclaimer: Please note that this document is to be considered other written advice. Any tax advice in this document was not intended or written to be used, and cannot be used, for the purpose of avoiding tax penalties that may be imposed on the taxpayer under the Internal Revenue Code or applicable state or local tax law provisions.
Furthermore, the information in this publication is accurate as of the time of its publication. AG Tax assumes no responsibility for changes to tax legislation subsequent to the publication of this document. The information provided is for general information purposes only and should not be acted upon without seeking professional advice. If you would like to engage our services, please contact our staff and obtain authorization to send our firm confidential information. A client relationship is not created by the transmission of information. A client relationship is only formed with our firm when a scope and engagement letter signed by the firm and the potential client detailing the terms of engagement is present.
[i] http://www.cra-arc.gc.ca/getready/
[ii] http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ll-dts/frms-eng.html
[iii] http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html
[iv] http://www.cra-arc.gc.ca/gncy/t1gtrdy/menu-eng.html – Why file online
[v]http://www.cra-arc.gc.ca/gncy/t1gtrdy/menu-eng.html – Filing or Paying late?
[vi] http://netfile.gc.ca/rdy-eng.html – keep your receipts