In addition to this, the Government of Manitoba also announced Healthy Hire Manitoba Program to encourage employers hire or rehire the vaccinated employees and recover from the pandemic.
Here are some tax tips you should be aware of:
Avoid taxes, don’t evade them .
To avoid taxes is to use provisions of the tax laws to your advantage. Evasion is a criminal offence with heavy penalties not limited to and including a prison sentence.
Be informed, know the numbers game .
Taxes are paid on a scaled rate system. The first $12,000. you earn is tax free. Personal returns are taxed on every dollar after the exception. Corporations are taxed at different rates and has more extensive issues within the corporation such as dividends. Dividends and capital gains are taxed at a different rate on personal returns. Taxes involve a federal rate and a provincial rate which could cost the tax payer between 25 to 50%.
Tax Credit or Deduction – Do you know the difference?
Deductions are claimed to reduce taxable income. Some deductions are RRSP’s, child care expenses, moving expenses, employment expenses and union/professional dues. A Tax credit is a payment towards you taxes payable. Examples are, pension income amount, Canada employment amount, home buyers amount, pension Income amount, disability and caregiver amounts, medical expenses, tuition/education, CPP/EI, and public transit.
Timing your Taxes – Cashing out RRSP’s or RRIF’s
There is a tax implication when cashing these out. Make sure these happen in your best taxable interest. These items are also taxed at 10%, so be aware that this transaction may cost you more in taxes on your tax return when added to your income in the year cashed.
Pay Taxes on time but not ahead of time
If you receive a refund each year, Revenue Canada is working with your money. It is best to pay minimal taxes and keep your refund for your use. To reduce your taxes at source, you can file a T1213 to make this request. Anyone owing more than $3000. in taxes each year is going to pay installments. Always review this request each year to make sure your situation has not changed.
Life Happens and there are things that may affect your taxes
Some significant events could be—getting a divorce or separation, negotiating salary or other compensation or moving to another province or country, etc.
Talk to your accountant as they offer broad advice to families, employees, self-employed, corporate decisions, investors, retirement, and on international/provincial/estate taxes. Luis Rubin is at the ready to assist you with all your tax needs.
Please call him at 204-944-8000 Ext 230