Tax News You Can Use

2012 Combined Federal & Ontario Marginal Tax Rates*

                                             Ordinary            Capital            Eligible            Small Business

Taxable Income                               Income              Gains            Dividends         Dividends

Up to $39,020                 20.05%                10.03%               -1.89%            2.77%

$39,020 - $42,707             24.15%                 12.08%                3.77%             7.90%

$42,707 - $68,719             31.15%                15.58%             13.43%             16.65%

$68,719 - $78,043              32.98%               16.49%              14.19%             17.81%

$78,043 - $80,963              35.39%              17.70%              17.52%            20.82%

$80,963 - $85,414              39.41%               19.70%              19.88%            23.82%

$85,414 - $132,406            43.41%               21.70%              25.40%            28.82%

Over $132,406                  46.41%               23.20%              29.54%            32.57%

          *to be used as a guideline only, please contact us if you need more specific information.

Medical Premiums paid through Payroll

Often employees are required to pay for health benefits directly through payroll. These Medical/Dental premiums are deductible as a medical expense and just require you to have proof of payment along with a letter from the employer or a paystub. Note that premiums paid for long or short term disability plans are not deductible.

Increase in RRSP Annual Limit

The annual limit for RRSP contributions has been increased to $22,450 for 2011. The maximum will be indexed to the increase in the average wage increase in future years.

Federal Children's Arts Tax Credit

A new Federal tax credit is now available for children who were under 16 at the beginning of the tax year. Parents can claim up to $500 for a variety of supervised artistic, cultural, recreational, or developmental activities outside of the school curriculum.

Self-Employed - Small Business

When starting a small business, taxpayers must establish that their first intentions are to make a profit and how they are conducting business (including the amount of time, money invested and a business plan). A business may be deemed a hobby with no allowable deductions if there is no reasonable expectation of profit within a reasonable time.

Hiring Credit for Small Business

This one time hiring credit is based on the increase of the Employer's portion of the Employment Insurance paid. If you are a small business you are eligible for a credit of up to $1,000. This will be calculated by CRA once your 2011 T4's have been filed.

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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