Category: Income Tax

About the Canadian Tax System

Canadian TaxIn Canada, both the federal and provincial governments collect taxes from its citizens and residents which are used to pay for the services provided to the people, including health care, education, Old Age Security and maintaining roads and highways. If you are a newcomer to Canada or are paying taxes for the first time, the following information will help you to learn about the Canadian tax system.

The two types of taxes levied by the federal and provincial governments are income taxes and consumption or sales taxes. Each province has either the Goods and Services Tax (GST) or the Harmonized Sales Tax (HST). The consumption tax is a sales tax on items that you purchase, such as clothes, restaurant meals and even certain services. Some items are exempt from the sales tax, such as basic groceries, rent and prescription drugs. The income tax, however, is simply a tax on the income that you earn each year and is calculated on a graduated scale, with higher earners paying more in taxes than those with low incomes.

Every resident of Canada must file an income tax return by April 30 each year. The Canada Revenue Agency considers you to be a Canadian resident if you have established significant ties in Canada. This could include having a permanent home in Canada, a spouse or dependents living in Canada or spending 183 or more days in the country in a given year. Residents must pay income tax on their worldwide income, not only income earned inside Canada.

It is important to note that Canada does not allow spouses to file a joint tax return. Each person must file their own tax return. However, there are various tax credits that can be claimed to reduce your tax owing. For example, if you are supporting a spouse, you can claim a spousal benefit for them on your tax return. There are also tax credits available for child care, medical supplies and other essential items.

Many people rely on the services of a professional accountant to file their tax return. If you are feeling confident enough, you can prepare your own tax return using any of the available tax return software packages available.

A Financial Adviser Knows Best Income Tax Rates Around the World

Financial planning Planning your finances is imperative in this dynamic age. You never know when things will change drastically putting you at heavy losses. Also, inflation is at its peak these days. In such a situation, it would be advisable to turn to a financial adviser who will help you with your finances in various ways. As well as keeping you updated with best income tax rates around the world, the adviser will offer many benefits in a number of ways.

Why hire a financial adviser

Financial advisers possess experience and expertise in managing finances efficiently. They know how to handle financial situations all through the year. No matter whether the economy is booming or passing through a bad phase, a planning professional will sort out ways to make the best out of your finances.

First of all, the adviser will study your financial situation. In accordance with your financial goals, the planning professional will come up with investments that will dig higher returns on your capital. With diversified investment options, the expert will help to make a balanced risk reward ratio.

The adviser will find out what are the best tax rates around the world. This will assist you in finding overseas markets that will not tax your investment income. By allocating your money in various investments dispersed all over the world, the adviser will make certain you earn money through multiple streams throughout the year.

The biggest benefit of having a financial adviser by your side is tax relief. A reputed adviser is well aware of tax exemptions offered by the government. He will guide you on harnessing those exemptions to avoid tax. He will also remind you on tax due dates so that you pay off your statutory dues on time without enticing fines.

Bottom line

Hiring the expertise of a reputed financial planner is beneficial to any individual. Aside from keeping you informed about best income tax rates around the world, the planning expert will help to take relevant investment decisions. By acting on the advice of the planning expert, you will save substantial money while maximizing returns on your investment. This is why it is advised to hire the services of a reliable financial planner to reap these varied benefits.