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Income tax question

swilly

TRIBE Member
I looked this up on the CCRA site but could not find anything. How much do you get back in taxes for paying rent etc..

I remember that I would always get back like 70 or so dollars for every month i paid rent while in university etc... it was like the low income housing support thing or something. I cant remember really.

Anyways anyone know how the calculation goes? is there a set amount per month or is it dependant on how much money you paid in rent?
Hopefully paying up the ass in rent last year will pay off....I doubt it though

swilly
 
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Booty Bits

TRIBE Member
rent goes on the ontario tax credit portion of your taxes.
i think it has to do with a % of the total dollars you spent on rent, but i could be wrong.
 

CLUSTER

TRIBE Member
I know this doesn't help the thread any, however rent's always been a big portion of my tax return. Gotta claim that for sheezie!
 

BayStreetBoi

TRIBE Member
I believe the figure they use is 20% of your rent deemed as "property tax". However that doesn't mean you get money back.

Next, they take $250 or the 20% of rent (whichever is less), and add to that 10% times your 20% of rent (in other words, 2% of rent).

The resulting sum is your credit, which is credited against your provincial taxes owing, but only to the point where they would be 0. You can't "get money back" simply as a result of the provincial property tax credit.

(The exception of course is if you've already had too much tax deducted from your pay cheques in which case you'll get the refund... but that's just returning money that was your's in the first place, not getting back a portion of your rent / property tax paid).
 

BayStreetBoi

TRIBE Member
You should also note that the amount can be reduced based on how much income you earn. You take the credit you calculated above and add $100 (your sales tax credit).

Now, you take your income, subtract $4,000 and multiply by 2%. Subtract this from the combined property tax / sales tax credit. Finally, you take the smaller of this amount and $1,000 (so the combined credits max out at $1,000).

The tax sheet that walks you through this can be found here: http://www.cra-arc.gc.ca/E/pbg/tf/5006-tc/5006-tc-04e.pdf
 
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echo

TRIBE Member
I OFFICIALLY HATE TAX SEASON!!!

HOW is it that my return can be so different from year to year when things haven't changed much with regards to my income? In the past three years I have managed to owe 100.00, receive a return of 400, and now owe 200.00?!?

My taxable income has not changed all that much and YET I OWE MONEY THIS YEAR?!? Fucking useless stupid ass taxes.

And to think I actually thought I would get a REFUND this year. Fucking hell - the last thing I can afford right now is to PAY the damn government MORE taxes. Of course it just so happens to be the provincial portion of my tax return that is killing me.

GAH. So frustrated right now.

*whimper* I need an accountant *whimper*

Is it possible that my tax program could be wrong?
 

Poot

TRIBE Member
Originally posted by BayStreetBoi


The resulting sum is your credit, which is credited against your provincial taxes owing, but only to the point where they would be 0. You can't "get money back" simply as a result of the provincial property tax credit.


i.e. it's a "non-refundable" tax credit.
 

SneakyPete

TRIBE Member
Amy:

Just because everything stays the same on your side doesn't mean every year it'll be the same. The government adjust how one is taxed from year to year, for example, the tax rate could change, the basic amount could change, etc. Often when the government talk about tax cuts or budgets on tv this is how they put them into effect. :)
 

echo

TRIBE Member
Well yeah - I figured as much Pete. I just wanted a chance to rant about taxes ;)

Just goes to show that one should never rely on getting a tax refund (unless of course one contributes to RRSP's which I WILL DO before the next tax season arrives).

A question to all accountant types out there. Do you think it would be worth it for me to have an accountant look at my taxes? My tax return is about as simple as it can get (only tax credits I have are interest on student loans and rent). Is there anything else out there that the average jo can do to reduce their taxes owing?
 

BayStreetBoi

TRIBE Member
Originally posted by echo
I OFFICIALLY HATE TAX SEASON!!!

HOW is it that my return can be so different from year to year when things haven't changed much with regards to my income? In the past three years I have managed to owe 100.00, receive a return of 400, and now owe 200.00?!?

My taxable income has not changed all that much and YET I OWE MONEY THIS YEAR?!? Fucking useless stupid ass taxes.


Take a look at your T4s and see if the actual tax deducted has changed significantly from year to year. They may have deducted more or less in certain years explaining the jump from refunds to owing...
 
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MrMarcus

TRIBE Member
^^^ I would like to know too. and at what income level do u have to start owing taxes on? (I've never owed before since I use to work cash jobs mostly until last year)
 

Poot

TRIBE Member
Originally posted by echo
Is there anything else out there that the average jo can do to reduce their taxes owing?


If you're an employee, there's not a whole lot at this point. There IS something to be said for tax planning (i.e. RRSP contributions, ensuring you manage other potential future exemptions (of a capital nature) the right way), but quite honestly, as an employee, there are very few breaks to be enjoyed. Going forward, you may wish to consider RRSP contributions & other favourably regarded expenditures/outlays.

The only other thing I would advise right now is that you compile & submit your medical expenditures -- you can, depending on your earned income, potentially earn a credit here. (You do have to break a threshold point -- lesser of 3% of income or $1,800ish (I'm not in public practice this year, so I'm not so closely following the actual $$ threshold amounts) -- before you see it come back to you, however.) Incidentally, the expenses can be compiled from any 12 month period that ends in the current tax year (and hasn't been claimed before) -- so, for example, if you had a slew of expenditures between June '03 and June '04, you can use this as your 12 month period, even though a portion thereof occurred in a prior tax year.

Be careful, however, about claiming insurance premiums; disability premiums particularly. If you claim your premiums as an expense for the medical credit, you will be taxed on any future revenues you (may) receive from the policy. The general concept is: you will pay tax on every dollar at some point. If you elect to deduct the expense, you will be taxed on receipt of the revenues themselves. You're better to not claim the premiums, so that if (god forbid) you were ever to receive an insurance payout as a result of illness/injury, you can receive those cash inflows on a tax-free basis.
 

Poot

TRIBE Member
Originally posted by echo
Do you think it would be worth it for me to have an accountant look at my taxes? My tax return is about as simple as it can get (only tax credits I have are interest on student loans and rent).

To answer your question re. 'is it worth it to have an accountant look at your return, etc.' -- NO. If it is a ROUTINE return, it is just a matter of plugging a few figures into the right boxes, and very little planning/manipulation to be done at this point. Every year I'm shocked by the number of people I speak to who have an absolutely straightforward return, but are ready to pay an accountant or tax prep service to do their return for them. If it's straightforward and only deals with employment income (and no contractor expenses etc.) save your money and do it yourself. It will probably take you, literally, 10 minutes to do. Why cough up the coin to pay someone to do this for you?
 

BayStreetBoi

TRIBE Member
Originally posted by MrMarcus
^^^ I would like to know too. and at what income level do u have to start owing taxes on? (I've never owed before since I use to work cash jobs mostly until last year)

2004's basic exemption is $8,012. So all other things equal (i.e. not taking into consideration rent deductions, RRSP contributions, any other credits), you can earn up to that amount without paying tax.
 

phunkymunky

TRIBE Member
Originally posted by SneakyPete
Amy:

Just because everything stays the same on your side doesn't mean every year it'll be the same. The government adjust how one is taxed from year to year, for example, the tax rate could change, the basic amount could change, etc. Often when the government talk about tax cuts or budgets on tv this is how they put them into effect. :)
also the amount you get taxed on your paystubs may differ from year to year and most likely does.
 
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echo

TRIBE Member
Originally posted by Poot
To answer your question re. 'is it worth it to have an accountant look at your return, etc.' -- NO. If it is a ROUTINE return, it is just a matter of plugging a few figures into the right boxes, and very little planning/manipulation to be done at this point. Every year I'm shocked by the number of people I speak to who have an absolutely straightforward return, but are ready to pay an accountant or tax prep service to do their return for them. If it's straightforward and only deals with employment income (and no contractor expenses etc.) save your money and do it yourself. It will probably take you, literally, 10 minutes to do. Why cough up the coin to pay someone to do this for you?

Thanks for all the great info Poot :)

I was afraid that was probably the case - re: straightforward tax returns. Needless to say I will definitely be contributing to RRSP's before my next tax return! I don't have much in the way of medical expenses - but I'll have a look and see what's there. I'll definitely look into claiming medical expenses next year as I have to get a dental crown done soon enough and that's not covered through my benefits at work!

>begins writing out a cheque to Canada Customs and Revenue<
 

Poot

TRIBE Member
Originally posted by echo
I'll definitely look into claiming medical expenses next year as I have to get a dental crown done soon enough and that's not covered through my benefits at work!
<


Take a look at what you have for this year, and decide what you should group with next year's rolling 12 month period. If you get the crown done in, say, April or May, you may wish to group this expense with your other medical outlays from April or May of this year for your 12 month time frame. (The expenses must have actually been incurred over the 12 month period, obviously. You can elect to use May - April, and then include January '04 expenses, and so on...)

The idea is to get to an aggregate amount that exceeds the threshold amount, so that you can actually receive a credit therefrom.
 

DEJproductions

TRIBE Promoter
I have a question about the Chinees income tax treaty. Do you know what type of documents they need in order to claim this tax exemption?
 

lobo

TRIBE Member
Originally posted by Poot
To answer your question re. 'is it worth it to have an accountant look at your return, etc.' -- NO. If it is a ROUTINE return, it is just a matter of plugging a few figures into the right boxes, and very little planning/manipulation to be done at this point. Every year I'm shocked by the number of people I speak to who have an absolutely straightforward return, but are ready to pay an accountant or tax prep service to do their return for them. If it's straightforward and only deals with employment income (and no contractor expenses etc.) save your money and do it yourself. It will probably take you, literally, 10 minutes to do. Why cough up the coin to pay someone to do this for you?

I think one reason people use "accountants" or other people do to their taxes is because they can sometimes get them some kind of money back by not so legit ways. I remember doing this back about 10 years ago for two tax seasons where the lady somehow managed to write off the interest or whatever on a plain old bank loan when there was no way in hell I was qualified for the deduction.

Lobo
 
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