2009 Estimated Combined Federal and Ontario Personal Tax Rates on Ordinary Income

At $36,848 - 24.15%          At $73,698  - 35.39%         At $126,264  - 46.41%

At $38,832 - 31.15%          At  $76,440 - 39.41%           

At $64,889 - 32.98%          At $77,663  - 43.41%          It is assumed that each bracket consists of ordinary income

Market Losses

With the turmoil in today's market, it is important to remember that to be deductible as a loss on your 2008 return, shares must have been sold prior to December 31^st. Also remember that gains paid back up to 3 years prior (2005) can be claimed against current (2008) losses.

Tax Free Savings Account

Effective January 2009, individuals can deposit up to $5000 (indexed annually) in a TFSA and although not deductible, investment income earned will be tax-free.  As well, unused contributions can be carried forward to future years.

Registered Disability Savings Plan

The RDSP is a new tax-free savings plan much like a RRSP for people eligible for the Disability Tax Credit. Hightlights include:

·         Each beneficiary will have one plan

·         Holder of the RDSP can be the parent of the beneficiary and with their (the holder’s) consent anyone can make contributions to the plan.

·         Contributions can be made up to the beneficiary’s 59^th birthday.

Pension Splitting

Continuing in 2008, eligible pension income can be split up to 50% to your resident spouse.   Both persons must agree and complete a joint election form with their tax returns.  We will gladly let you know the benefit in your individual circumstance.

Tax Shelter Gifting Arrangement

Taxpayers should be aware that CRA continues to audit tax shelter gifting arrangements and every audit completed to date has resulted in a reassessment of tax, plus interest. CRA will go back three years.  Before making a contribution it is a good idea to check that the organization has a valid charitable status.

Interest on Overdue Accounts

CRA changes their interest rates quarterly on overdue accounts.  For the 2^nd quarter of 2009 the interest rate is 5%.

Ontario Textbook and Technology Grant

     The Ontario Textbook and Technology Grant is a new and is designed to help full-time University and College Students with the cost of textbooks.  At present the grant is valued at $150 per year but will increase to $300 when fully implemented.  For further info    

https://osap.gov.on.ca/eng/not_secure/plan_grants_full_sepapp_ttg_12345.htm 

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The information presented is only of a general nature, may omit many details and special rules, is current only as of its published date, and accordingly cannot be regarded as legal or tax advice. Please contact our office for more information on this subject and how it pertains to your specific tax or financial situation