|
|
| *The Commerce Journal>>>Canada Taxes |
Teenager - Canada Income Tax Help? |
I am taxed at roughly 13%. This is the amount taken off of my paycheque. However, I am concerned about the different types of tax brackets and what I must pay etc. If you make under a certain amount (i think its around $8,000?) you get a full refund, but then if you make more than that, and less than $37,000, you have to pay 22%? and if you pay 22%, is that on your entire income? So for example, lets say that if you make less than $8000, you do not have to pay any taxes, and you get a refund of the 13% that was taken from your paycheque. Now, if i were to make $8001, i would have to pay 22% of that money (which is like $1760) to the government? I am really confused as to how all these income taxes work. Last year, I only had an income of $3992. I paid $544.46 in taxes through my paycheque, and then when I filed my return, the government gave me back $644.46 ($100 more than what was deducted from my pay) Could someone please briefly go over how income tax works? The income tax act is a complicated thing. There are currently four tax brackets. You are taxed at a rate of 15.25% for income up to $36,378. For income between $36,378.01 and $72,756 the tax rate is 22%. For income between $72,756.01 and $118,285 the tax rate is 26%. And for any income over $118,285.01 the tax rate is 29%. Technically there is no flat rate of tax - your income is taxed at different rates depending on how much you make. However, everyone is allowed a basic exemption which changes every year. For 2006 it was $8,839. (There are many other deductions individuals may qualify for which help reduce the amount of tax you have to pay.) Basically if you make equal to or less than this basic amount in income you do not have to pay taxes. If you make $8,840 then you would pay tax on $1 at a rate of 15,25%. You could make $20,000 in income but not pay any taxes depending on your sources of income and what deductions you qualify for. Generally speaking you take your amount of income and minus allowable deductions and pay taxes on that amount based on the tax brackets. Revenue Canada has a form to calculate the federal taxes and breaks down the amount of tax under each bracket. http://www.cra-arc.gc.ca/e/pbg/tf/5000-s... Keep in mind each province has its own taxes and deductions as well. As for you personal situation, when your employer withholds money it is not only for income taxes but also EI and CPP. When you complete your income taxes, often when your income is not that high you will receive some of the deductions for EI and CPP back as well. Therefore, you the larger refund. A larger refund could be that you made a mistake on your forms as well. There should be an explanation sent to you. I hope this gives you an idea about how taxes work. For the average teenager, taxes are relatively basic. Remember to claim for GST credit when you reach legal age. I live in VA, so I'm not sure about Canada taxes, but here is a site for you if you want to look over it. http://en.wikipedia.org/wiki/taxation_in... |
| Tags |
| Spain Taxes Singapore Taxes Mexico Taxes Ireland Taxes India Taxes Germany Taxes Canada Taxes Australia Taxes Small Business Renting & Real Estate |
| Related information |
January, April, July and October- four times yearly and only if you are eligible to receive it as well. Source(s): I'm Canadian... A dividend of any sort is paid out of a corporation's after tax income; the corporation has already paid the tax on this dividend. A dividend in kind is taxable in the hands of the pe... If you have notes of financial statments prepared, you may see a headings "Subsequent Events". If you see this heading, then place a check mark on the question as stated on schedul... You should call, or check online. CRA's refunds are being processed normally.... No gains to report since its your principle residence,... Here is the link for the taxpayer relief provisions. ... No. What ever taxes you pay in the U.S. would be claimed on your Canadian tax return. The maximum tax you will pay is at the Canadian tax rate. Your best advice will be to contact a Canad... If you have a bond fund, you will likely receive regular distributions of interest income. That is taxed as interest income. If the bond fund increases or decreases in value, and you sell it... |
Commerce Categories--Copyright/IP Policy--Contact Webmaster |