Category Archives: Canada Revenue Agency

2015 Income tax rates

Canadian Tax Brackets 2015 | Income Tax Bracketsimages 2

  • 15% on the first $44,701 of taxable income
  • 22% on the next $44,702 of taxable income (on the portion of taxable income between $44,702 and $89,401)
  • 26%on the next $89,402 of taxable income (on the portion of taxable income between $89,402 and $138,586)
  • 29% of taxable income over $138,586
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RRSP Deadline 2015 for 2014 RRSP Contribution

RRSP Deadline 2015 for 2014 Tax Year: March 01, 2015

Your RRSP deadline for contributing to your RRSP for the 2014 tax year has to be before March 01, 2015.

You may contribute to your RRSP until December 31 of the year in which you reach age 71. The following limits and deadlines apply annually.

Maximum Annual RRSP Contribution Limits

Year Contribution limit
2011 $22,450
2012 $22,970
2013 $23,820
2014 $24,270
2015 $24,930

Your allowable RRSP contribution for the current year is the lower of:

  • 18% of your earned income from the previous year, or
  • The maximum annual contribution limit for the taxation year, or
  • The remaining limit after any company sponsored pension plan contributions.

Earned income includes salary or wages, alimony received, and rental income, among other income sources, but does not include items such as investment income.

Company Pension Plan or Deferred Profit Sharing Plan – As a member of a company–sponsored registered pension plan or deferred profit sharing plan, the amount that you can contribute to your RRSP must be reduced by the total value of the pension credits you earned for the year.

This amount is referred to as a pension adjustment (PA) and it is reported on the T4 slip (Statement of Remuneration Paid) that you receive from your employer.

Annual Contribution Deadline – To be eligible for an RRSP deduction in a specific taxation year, you can make contributions anytime during the year, or up to 60 days into the following year.

CRA Requirements for Invoices

The CRA’s requirements for invoices depend on the total sale amount.

For sales Under $30, there are 3 pieces of information:
– The name of the business
– The invoice date
– The total amount paid

For sales Between $30 and $149.99, include the above 3 points, plus:
– The total amount of HST/GST charged on the sale
– If the sale has items taxed at different rates, you must show the break-down of the amount of tax at each rate
– The business number of the business issuing the invoice

For sales Over $150, all points above must be included, plus:
– A brief description of the goods or services
– Terms of payment

Do you need a Business Number?

Congratulations. You’ve decided to start a business! In what has no doubt been an unsettling last few years of employment high and lows, more Canadians than ever are deciding to venture out on their own and forge their own paths through small business. There’s one thing that’s essential when it comes to getting your venture off the ground…your business number.

What’s a business number? Good question. According to the CRA:

The Business Number (BN) is a numbering system that simplifies and streamlines the way businesses deal with the federal government. It is based on the idea of one business, one number. Each business requires one BN for its legal entity. A legal entity is defined as a sole proprietor, partnership, corporation, trust or other organization.

It’s a 15 character identifier of your business. It has two parts; a nine digit number that identifies your legal entity, and a 6 character portion composed of letters and numbers that identifies the particular tax account. The nine digit number part of the Business Number never changes; the second part of the Business Number will change depending on which tax account the number refers to.

This number is the single key in dealing with the federal government on payroll, tax remittance, import/export activities, and a variety of other items. Your business number is what’s required to be referenced with the CRA when it comes to discussing the details about anything related to remittance, tax, or business activity subject to tax.

You need to register your business and get a business number. A good resource for this is the Canada Revenue Agency’s website. You can find the link here:

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/bn-ne/menu-eng.html

You can also register your business online here:

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/bn-ne/bro-ide/menu-eng.html

 

Tax Tips from Revenue Canada

Tax Tip: Top 10 ways to reduce your tax bill

Did you know…There are a number of ways to reduce the amount of tax you owe and keep more money in your pocket at tax time. The Canada Revenue Agency (CRA) can help you learn more about the various credits and deductions that you may be entitled to and that can save you money when you file your 2011 income tax and benefit return.

Important facts

For individuals:

1. Plan ahead – Register for My Account, gather your receipts and NETFILE access code, and sign up for direct deposit before April 30. Submitting your income tax and benefit return before the tax-filing deadline means you can avoid having to pay late-filing penalties.

2. Families – Save those receipts! All the activities you have been paying for throughout the year (piano, karate, tutoring, hockey, and more) may save you money at tax time.

3. Tax-free savings account – A tax-free savings account (TFSA) is one great way to save money since you don’t pay tax on any income you earn from investments in your TFSA.

4. Registered retirement savings plan – Any income that you earn in a registered retirement savings plan (RRSP) is exempt from tax, as long as the funds stay in the plan. RRSPs help you save for your retirement and give you a break at tax time too.

5. Public transit tax credit – If you or someone in your family is a regular user of public transit, then you may be able to claim a non-refundable tax credit based on the cost of eligible transit passes.

6. Pension income splitting – If you receive income from a pension, you can split up to 50% of eligible pension income with your spouse or common-law partner to reduce the taxes that you pay.

7. Students – Are you still in school? Students can claim the tuition, education, and textbook amounts. Have you graduated recently? You may be eligible to claim the interest that you paid on your student loans.

8. Child care expenses – If you have children, you may be able to claim child care expenses that you or your spouse or common-law partner paid so that either of you could work, do research, or go to school.

9. Home buyer’s tax credit – If you’re a first-time home buyer you may be eligible to claim $5,000 on the purchase of your new home, which can save you up to $750.

For people who are self-employed:

10. Hiring an apprentice – Did your business employ an apprentice? A salary paid to an employee registered in a prescribed trade in the first two years of his or her apprenticeship contract qualifies for a non-refundable tax credit for the employer.

For the full post please visit the CRA web site.

GST Remittances & Information

Goods and services tax (GST 5%) is a tax that applies on most supplies of goods and services made in Canada. Examples of goods and services for which GST is not charged and collected include:

• Used residential housing

• Long-term residential accommodation

• Most health, medical, and dental services

• Child-care services

• Most domestic ferry services

• Legal aid services

• Many educational services or tutoring services

• Music lessons

• Most services provided by financial institutions

• Insurance policies

• Most goods and services provided by charities

Certain goods and services provided by non-profit organizations, governments, and other public service bodies.

Companies which provide taxable supplies in Canada, and have total revenues from taxable supplies of $30,000 or more in the last four consecutive calendar quarters must register for GST. When registering for GST, the reporting period should be the same as your fiscal year for income tax purposes. Input Tax Credits (ITC’s) can be claimed on the GST return to recover GST paid or owed on purchases and expenses for the business. When completing the GST return, deduct the total Input tax credits (ITC’s) for the reporting period from the GST collected and the result would be the net GST Refund (or payable ).

For companies with $500,000 or less in annual taxable revenues, there is an option to either have a quarterly reporting period or an annual reporting period. If your reporting period is monthly or quarterly, the filing and remittance deadline is one month after the end of the reporting period. If your reporting period is annual, the filing and remittance deadline is usually three months after the end of the reporting period.

For annual filers, if your net tax for the current or previous quarter is less than $3000, then paying quarterly installments is not necessary. For those who need to make installment payments, the deadline is one month after your fiscal quarter end date.

Effective July 1, 2010, GST 5% is replaced by Harmonized Sales Tax (HST) 12% in the province of British Columbia and HST 13% in the province of Ontario.

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