MCS 2100 Lecture Notes - Lecture 2: Tax Rate, Tax Bracket, Dividend Tax
Document Summary
Main tax form is t1 general: fill amounts from taxable income, income deductions and federal and provincial tax payable, as you fill out t1, will use various schedules. Schedules used to calculate amounts, which then are put into t1 general. Main schedules used to calculate federal and provincial tax payable, investment income, tuition and education amounts, and charitable donations. Income included in tax year in which its received. Deductions- amounts the we"re allowed to subtract from income: result is called net income. Deductions related to expensed that we incur while earning an income: notable exceptions- contributions made to rrsps, rpps and ipps. Deductions don"t benefit all taxpayers equally: taxpayers in top tax bracket will receive greater benefit. Schedule 1- used to calculate federal taxes: 4 federal tax brackets. As income increases, percentage paid in taxes increases also: marginal tax rate (mtr)- tax rate you pay on the next dollar earned.