Akonstax

Effective January 1,2010 Tax payers in Ontario will pay 5% Provincial income tax as compared to 6.05% formerly on income less than or equal to $37,106 (as compared to $36,848 before)

Dividends are classified by Canadian Income Tax into "Eligible and Non Eligible" Eligible Dividends are one received from public listed companies and non eligible dividends are one received from private corporations. Eligible dividends are grossed up at 145% and non eligible one are grossed at 125% which means if you have $1000 dividends from a company , first you multiply by 1.45 or 1.25 depending upon type of dividends you received. Grossed up is included in tax and tax credit is given as follows: Eligible dividends, the federal dividend tax credit will be 11/18 of Gross dividend($45*11/18=27.50) or about 19% (27.50/145*100)effectice tax credit on Grossed Dividends . For Example Eligible Dividends ($1000Grossed Up) $1450.00 Assuming 30 % tax rate- tax on dividends               $435.00 Less Federal Tax Credits (19% *1450)             ...

At times it is difficult to keep track of distributions, splits, consolidations of income trusts units and close end funds. Normally I use a spreadsheet for tax reporting purposes. Here is a website which helps you calculate accurate ACBs( Adjusted Cost Base ) of each fund. Taxes and investments become easy to calculate.Click on ACB link below:                                                    ACB

http://www.cra-arc.gc.ca/formspubs/frms/td1/2009/td1/td1-09e.pdf

Michael Hatch, an economist for the Canadian Automobile Dealers Association said that "$30,000 car could be hundreds of dollars cheaper in Ontario and BC once a single, harmonized sales tax replaces separate federal and provincial sales taxes . " We will watch his observation and hope it will really reduce car prices in 2010. Read the story below . http://www.cbc.ca/canada/ottawa/story/2009/12/18/ottawa-cars-hst-cheaper.html

HST or Harmonized sales tax everyone discusses these days in Ontario. What and How it will affect a comman man, we are going to be taxed more in time to come and how to cope with another tax burden are some of issues in every one's mind. HST will become effective in Ontario from July 1, 2010. 2009 Ontario Budget proposed to harmonize 8% GST and 5% Provincial sales tax to create a single , value added HST at a rate of 13%. Government's rationale behind HST is that businesses pay PST On buying equipment, supplies and machinery which they are not able to claim input tax credits (As in GST),eventually this cost is passed on the consumers. By harmonizing two taxes businesses will receive tax credits even on provincial tax component and by doing so they will be able to pass on tax savings to consumers. In practice, these arguements hardly make sense. I doubt whether consumers will ever see prices of products falling. On the other hand, every time one will fill gas ,additonal 8% will ...