Wasseem Dirani Provides a Crash Course on Canadian Taxes

Wasseem Dirani Discusses Canadian Taxes

Why We Pay Taxes

The government needs tax revenue to operate. Up to 49 percent of the Canadian federal government’s revenue comes from the individual income tax. Taxes pay for useful infrastructure and services like schools, roads, and law enforcement.

Progressive Tax System

Canada has a progressive tax system. This means that each ascending tax bracket has a higher tax rate on individual income. For every dollar you earn, you will keep less as you rise through tax brackets.

Tax Withholding

Most employees have their tax withheld from their paycheques. However, not all employees have their taxes withheld and must calculate their taxes themselves. This includes freelancers and other self-employed people.

Tax Deductions

Canada offers many categories of tax deductions for individual taxpayers. Wasseem Dirani summarizes these deductions.

Family and Caregivers

Taxpayers may claim deductions for child care expenses, child support payments, caregiver expenses, and adult dependents. These credits could allow parents and caregivers to claim significant amounts of their income. This represents Canada’s commitment to supporting families.

Education

Wasseem Dirani on Education Tax Breaks

Disability

If you or your dependent have a physical or mental impairment, you may be able to claim disability tax credits. Caregivers can claim it on their taxes, and those with impairments can file it on their own as well.

Pension and Savings Plans

Certain pension and savings plans, such as those provided by the government, are not taxable under Canadian law. RRSPs and PRPPs are both eligible to receive tax deductions and credits.

Employment Expenses

Many employment expenses are deductible. Union dues, moving expenses, employment insurance premiums, and other categories are covered.

Provincial and Territorial Tax Credits

Provincial and territorial income tax is charged along with federal tax. Fortunately, there are tax credits available in most provinces and territories which can defray this amount.

Little-Known Tax Credits

In addition to these most frequently claimed credits, there are hidden credits that most taxpayers are not aware of. Using these credits can help to lower your tax bill and increase your personal financial health.

Understanding the Canadian Tax System

Canadian taxpayers should make sure that they are well-versed in the intricacies of tax law. When it comes time to pay taxes, you will want to reduce the amount you owe while complying with all relevant tax laws. If you fail to comply with tax laws, you may incur serious penalties, including fines and possible criminal prosecution.

Consulting With an Expert

Wasseem Dirani suggests getting professional help at tax time. A professional tax preparer can help you get all of the deductions you are due to receive and make sure that you are ready to comply with tax law.

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Wasseem Dirani

Wasseem Dirani

Wasseem Dirani of Hamilton, Ontario, is the President of Taxes to Save. He and his company pride themselves in providing excellent tax consulting services.