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2014 CORPORATION TAX RATES FOR: 

Technical Service Corporation   Hygiene CorporationProfessional Corporation

Canadian Controlled Private Corporations  (CCPC)
(Typically, incorporated small businesses with active business income.)

Taxable Income

$

Combined Federal & Provincial Proposed Tax Rate

(%)

0 – 500,000

15.50

500,001+

26.50

 

Investment Income:                 46.17 %

 

 

 2014 Canada Pension Premium:

Maximum Pensionable Earnings:    $52,500

Basic Exemption: $3,500

Maximum Employee Contribution: $2,425.50

Maximum Employer Contribution: $2,425.50
2013 Employment Insurance Premium:

Maximum Insurable Earning: $48,600

Maximum Employee Contribution: $913.68

Maximum Employer Contribution: $1,279.15

TAX FREE THRESHOLD
One can earn interest or ordinary income of up to approximately $11,250 in 2014 in most cases and pay virtually no tax.

Equivalent Personal
After Tax Investment Yields

 

Interest or Ordinary Income

  Capital Gains

 

 

Canadian Dividends1

 

  CanadianDividends2

$ Received

100.00

69.79

84.34

76.05

Taxes

46.40

16.19

30.74

22.45

Net Return

53.60

53.60

53.60

53.60

 

1 Assumes dividends from CCPCs paying income tax only at the small business rate

2 Assumes dividends from CCPCs paying income tax over the small business rate or public companies

 

Hence, those individuals in the top tax bracket would net the same amount after taxes if they received $100 in interest, $69.79 in capital gains or $84.34/$76.05 in Canadian dividends. Canadian dividends from CCPC paying income tax over the small business rate or public companies are taxed at the lowest rate.

RRSP Limits

Current year’s RRSP limit is 18% of the previous year’s earned income.

 

Year

$

Previous Years’ Earned Income Required ($)

2014

24,270

134,833

2015

24,930

138,500

 

 

 

 

 

Hence, one must have an earned income of $138,500 in 2014, in order to maximize the RRSP amount of $24,930 in 2015.

TAX TABLE
 What will my personal tax bill be for 2014?

Self employed Taxable Income

($000’s)

Estimated Taxes

Including Ontario Health Premium ($000’s)

20

2

30

4

40

6

50

9

60

12

70

15

80

18

90

22

100

27

150

49

200

72

250

95

300

119

400

165

500

211

1000

459

 

In addition to the above, add CPP (maximum $4,851.00).

 

 

CARS

OWN

 

   
Maximum amount on which CCA (tax depreciation) may be claimed $30,000 (plus HST)

                              OR

 

   
Maximum monthly interest deductions $300

 

LEASE

 

   
Monthly Lease Limit $800 (plus HST)

 

 

                             OR

 

   
Tax Free Allowance First 5,000km:53 cents/kmEach additional km:  47 cents/km

 

Employer Health Tax (EHT)

Those with professional corporations (PC) should pay special attention.  Note:  MD or DDS who owns a PC will also receive salary from the PC.  This salary is part of the “Gross Salary for All Employees”.

Gross Salary for all Employees

$

EHT

0-450,000

0

450,001+

(Gross Salary for All Employees minus $450,000)** times 1.95%

** This exemption must be shared among associated employers, whether incorporated or unincorporated.

 

David Chong Yen, CFP, CA of DCY Professional Corporation Chartered Accountants is a tax specialist and has been advising dentists for decades. Additional information can be obtained by phone (416) 510-8888, fax (416) 510-2699, or e-mail david@dcy.ca. www.dcy.ca. This article is intended to present tax saving and planning ideas and is not intended to replace professional advice.

 

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