Tax Measures

PERSONAL:

  • Starting in 2019, new Childcare Access and Relief from Expenses (CARE) tax credit for families with combined net income of $150,000 or less. All families can still claim child care expenses as in the past. Credit is based on:
    • Rate which corresponds to your family’s household income (see “CARE Tax Credit” chart below)
    • Amount of child care expenses deduction claimed on your tax return (i.e. the lower of actual child care expenses incurred and the maximum child care expense that can be claimed)
  • New Low-Income Individuals and Families Tax Credit (LIFT) to eliminate provincial personal income tax for low income taxpayers with employment income is in effect as of January 1, 2019.

CORPORATE/BUSINESS:

  • Ontario will implement the Job Creation Investment Incentive – Business owners will be allowed to write-off capital assets (i.e. equipment, leaseholds, computers, software etc.) faster for purchases made after November 20, 2018. This is the same as the Federal Accelerated Investment Incentive but relates to provincial taxes.

What does this mean for you?

CARE – A family with household income of $120,000, a two year old child and who spent $15,000 in child care expenses would receive $1,360 (17% X $8,000). See chart below to determine what rate your family qualifies for. The rate is multiplied by $8,000 even though you spent $15,000 because the maximum child care expenses is $8,000 per child 6 years and under.

LIFT – Low income family members could save up to $850 in provincial personal income taxes. To qualify, the taxpayer must have employment income. The potential tax savings (i.e. $850) is reduced where the taxpayer’s income exceeds $30,000 or the family’s income exceeds $60,000.

Job Creation Investment Incentive – Faster write-offs in the year of purchase for capital assets (dental equipment, computers, leaseholds etc.) will also apply to provincial portion of taxes.

What will my personal tax bill be for 2019?

PERSONAL TAX TABLE

Self-employed Taxable Income

($000’s)

Estimated Taxes

Including Ontario Health Premium ($000’s)

20 2
30 4
40 6
50 8
60 11
70 14
80 17
90 20
100 24
150 45
200 69
250 95
300 122
400 176
500 229
1,000 497

*In addition to the above, add CPP (maximum $5,498) if you are self-employed.

CARE Tax Credit

Family Income Tax credit rate
0 – 20,000 75%
20,001 – 22,500 73%
22,501 – 25,000 71%
25,001 – 27,500 69%
27,501 – 30,000 67%
30,001 – 32,500 65%
32,501 – 35,000 63%
35,001 – 37,500 61%
37,501 – 40.000 59%
40,001 – 45,000 57%
45,001 – 50,000 55%
50,001 – 55,000 53%
55,001 – 60,000 51%
60,001 – 63,600 49%
63,601 – 67,200 47%
67,201 – 70,800 45%
70,801 – 74,400 43%
74,401 – 78,000 41%
78,001 – 81,600 39%
81,601 – 85,200 37%
85,201 – 88,800 35%
88,801 – 92,400 33%
92,401 – 96,000 31%
96,001 – 99,600 29%
99,601 – 103,200 27%
103,201 – 106,800 25%
106,801 – 110,400 23%
110,401 – 114,000 21%
114,001 – 117,600 19%
117,601 – 121,200 17%
121,201 – 124,800 15%
124,801 – 128,400 13%
128,401 – 132,000 11%
132,001 – 135,600 9%
135,601 – 139,200 7%
139,201 – 142,800 5%
142,801 – 146,400 3%
146,401 – 150,000 1%
150,000+ 0%

CORPORATE/BUSINESS:

What will your corporate tax bill be?

Taxable Income $ 2019 Combined Federal & Ontario Tax Rate (%)
0 – 500,000 Between 12.50% and 18.50%*
500,001+ 26.50%

*Subject to reduction of small business deduction based on passive income earned.

Applies to active business income of a Canadian Controlled Private Corporation (CCPC) (i.e. DPC/H/TSC). Investment income of a corporation would be taxed at 50.17% tax rate.

This summary was prepared by DCY Professional Corporation Chartered Professional Accountants who have been advising dentists/doctors for decades. Additional information can be obtained by phone (416) 510-8888, fax (416) 510-2699, or e-mail david@dcy.ca, basil@dcy.ca, eugene@dcy.ca, louise@dcy.ca.  Visit our website at: www.dcy.ca. This article is intended to present tax saving and planning ideas and is not intended to replace professional advice.