fbpx

The Numbers Behind Your Personal Income Tax

Personal income tax law can be complex and interpreted in a number of ways. That’s why it’s important to discuss your specific personal or business needs with your accountant. Not just at tax time! They can recommend strategies that keep you compliant, while keeping more money in the bank. Business planning throughout the year can make tax-time less stressful as you’re already aware of your business finances. Below are some of the numbers behind your tax return and your maximum contributions this year.

On January 1, 2020, all indexed personal income tax amounts, including tax bracket thresholds and amounts used to calculate non- refundable tax credits, were adjusted by 1.9%. The Canada Child Benefit and the goods and services tax credit will take effect July 1, 2020.

 

For 2020 the federal tax bracket thresholds are:
  • 15% for taxable income between $0.00 and $48,535;
  • 20.5% for taxable income above $48,535;
  • 26% for taxable income above $97,069;
  • 29% for taxable income above $150,473; and,
  • 33% for taxable income above $214,368.

RRSP Contribution Deadline

The RRSP Contribution Deadline for the 2019 tax year is Monday March 2, 2020. The annual contribution limit for 2019 is $26,500.

TFSA Limit

The Tax Free Savings Account limit is $6,000 for 2020.

Rates & Maximums Charts

CPP—2020
Year’s Maximum Pensionable Earnings $58,700.00
Year’s Basic Exemption (by pay period type):
→ Annual $3,500.00
→ Monthly (12) $291.66
→ Semi-Monthly (24) $145.83
→ Bi-Weekly (26) $134.61
→ Weekly (52) $67.30
Maximum Contributory Earnings $55,200.00
Contribution Rate — Employee/Employer 5.25%
Contribution Rate — Self-Employed 10.5%
Maximum Contribution — Employee/Employer $2,898.00
Maximum Contribution — Self-Employed $5,796.00

 

EMPLOYMENT INSURANCE—2020
Maximum Annual Insurable Earnings $54,200.00
Premium Rate (Employee) 1.58%
Premium Rate (Employer, 1.4 x Employee) 2.212%
Annual Maximum Premium (Employee) $856.36
Annual Maximum Premium (Employer) $1,198.90

 

TD1—PERSONAL INCOME TAX CREDIT RETURN
(FEDERAL)—2020
Basic Personal Amount
(Note: applies if net income is less than $150 544, otherwise it is linearly reduced down to $12 298 at a net income level of $ 214 368.)
$13,229
Eligible Dependent or Spouse or Common-Law Partner Amount (see note above) $13,229
Pension Income Amount $2,000
Age 65 Amount $7,637
Disability Amount $8,576
Canada Caregiver Amount $7,276
Family Caregiver Amount for children under age 18 $2,273

For more advice feel free to contact us, or drop in at one of our four locations throughout Victoria and the Westshore. We’d be happy to help you navigate the complex world of taxes.