2016 Income Tax

[chathamf]

Is there any websites or anything you guys use to calculate your income taxes before the year ends? I am making a lot more money this year than I am used to, and have actually been contributing to RRSP's and whatnot for the first time. I want to get an idea if I will be paying in or getting a return and plan to dump money on my RRSP's before the cut off to maximize my return. Was hoping there was somewhere that I could play with some numbers and get it all figured.

Such a thing exist or am I going to need an accountant?

[Manhattan]

https://simpletax.ca/

[chathamf]

Originally posted by Manhattan
https://simpletax.ca/

I use that to file my taxes, but they won't let you input the info for 2016 with the updated tax rules and whatnot.

[sabad66]

The RRSP contribution cutoff for 2016 tax year will be Feb 28, 2017 so you have a couple of months to contribute even after the year is over.

that means you can plug in your numbers around mid January into any 2016 software and then you can play around with your contribution amount to see how it affects your return.

[sabad66]

you could also use something like this:
http://www.ey.com/CA/en/Services/Tax...6-RRSP-Savings

it won't tell you your exact return because it doesn't know how much tax you paid (withheld from your paycheque), but at least it will give you an idea of how much total tax you will save.

[Xtrema]

Originally posted by chathamf
Is there any websites or anything you guys use to calculate your income taxes before the year ends? I am making a lot more money this year than I am used to, and have actually been contributing to RRSP's and whatnot for the first time. I want to get an idea if I will be paying in or getting a return and plan to dump money on my RRSP's before the cut off to maximize my return. Was hoping there was somewhere that I could play with some numbers and get it all figured.

Such a thing exist or am I going to need an accountant?

1st of all, do you know what your RRSP limit is? You know that's a number that based on returns from 2015 and back right?

There are 2 income taxes, Federal and Provincial.

For 2016, Alberta incomes taxes start to increase at $125K and up at 12%. Federally, the top 3 brackets are $90K and up, starting at 26% and up to 33% for anything $200K and up.

So if you want to use RRSP to reduce income tax, you probably want buy enough to shelter your income over $90K from higher rate of taxes. If you made less than $90K this year, putting money in RRSP may not be in your best interest as tax saving goes.

For example, let's say you made $140K and decided to buy $20K of RRSP. You would have saved 38% of that $20K and have a $7.6K of return.

If you only make $90K and decided to buy the same $20K, since you are only taxed at 30%, you would have only $6K in return. Still nice but that's why some people prefer to carry over the RRSP limit until they make more $ and go into the higher brackets.

I don't know if it's worth repeating here, there got to be a crap ton of threads on RRSP strategy. Everyone has different goals and different take. For some TFSA make more sense. For some RRSP does.

[speedog]

If you know what your regular income is going to be, you could use Revenue Canada's payroll calculator - ]link.

[PeterGTiR]

http://www.ey.com/CA/en/Services/Tax...6-Personal-Tax

Take the YTD income on your payslip
Deduct RRSP contributions
Plug net number into calculator
Take the taxes from the calculator and
Compare it to the YTD tax withholdings on your payslip