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Thread: 2016 Tax time

  1. #21
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    When I get my bonus, I automatically put 1/4 into RRSP's to offset any extra taxes consequences I have the next year.
    Last edited by nickyh; 02-24-2017 at 01:33 PM.

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    Originally posted by nzwasp
    When your company taxes you though, how do they determine what tax rate to tax you at. I.e if you make $125k per year and then got a 50k bonus about now would your company tax you as if you were making 175k or at 125k i think thats where the problem starts because as soon as you go over that $142k threshold sometime in the year they are still taxing you as if you only made 125k but you are really getting taxed to little.
    Typically, the company will tax the bonus at the employee's highest tax rate (not even their marginal).

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    Originally posted by lasimmon
    As usual me company won't send out T4's till sometime in march and I will have to guess if I should contribute to some RRSP if I am owing or not.
    Legally they need to be prepared by the last day of Feb. Mailing them out obviously takes a little time but I somehow think they need to be in your hands on the last day of Feb.


    I had an issue with my 2014 T4, i notified my company of the error, and i had to wait 2.5 weeks to get it corrected.

    I called CRA to find out what the rules were and when my company was not responding to my questions, I told them I called CRA and then they very quickly re-submitted.

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    Originally posted by nzwasp
    When your company taxes you though, how do they determine what tax rate to tax you at. I.e if you make $125k per year and then got a 50k bonus about now would your company tax you as if you were making 175k or at 125k i think thats where the problem starts because as soon as you go over that $142k threshold sometime in the year they are still taxing you as if you only made 125k but you are really getting taxed to little.
    If you anticipate such a bonus, you can up the regular deductions to make up for that.

    But as someone else said, paying taxes is a better than getting a return if you factor in the time value of money.

    I believe the normal deductions are done so at a per pay basis but annualized. So if a semimonthly gross paycheck is at $5000, then the deduction is based off of the effective rate for $5000x24 = $120000. If the next paycheck is $50,000, then the deduction for that paycheck is based off the effective tax of $50,000x24 = $600,000.

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    What's everyone's rush to get taxes done so early?

    You have 2 years to file if you don't owe taxes.

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    ^ Has never gotten a big bonus before.

  7. #27
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    Originally posted by realazy
    What's everyone's rush to get taxes done so early?

    You have 2 years to file if you don't owe taxes.
    I owe pretty much every year so I have to get them done.

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    Originally posted by suntan
    ^ Has never gotten a big bonus before.


    I have the issue where my employer doesn't tax the Stock Savings matching portion. So whenever that vests, every year I owe like half of it to Rachel and Justin

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    Originally posted by jwslam



    I have the issue where my employer doesn't tax the Stock Savings matching portion. So whenever that vests, every year I owe like half of it to Rachel and Justin
    Wut.

    Just because stocks vest doesn't mean you owe tax on them.

  10. #30
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    What's a bonus

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    Originally posted by suntan
    Wut.

    Just because stocks vest doesn't mean you owe tax on them.
    It does because the company bought them and they become income on me.

    Otherwise I have zero clue how to explain why my T4 is so much larger than my salary when there were no bonus payouts last year.

  12. #32
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    Originally posted by jwslam

    It does because the company bought them and they become income on me.

    Otherwise I have zero clue how to explain why my T4 is so much larger than my salary when there were no bonus payouts last year.
    You probably have RSU's (Restricted Share Units) or something similar.
    In that case, when they vest each year they are added to your income at year end and included in your T4, box 101, and you have the tax you "pay" included as well.

    It means when you exercise them you only need to pay the capital gain.

    Under stock options, nothing is reported in your income until you exercise them. Then it's the capital gain and the income you actually did earn is added to your current year income as well as the taxes and all the other fun boxes that get filled in.

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    Originally posted by jwslam

    It does because the company bought them and they become income on me.

    Otherwise I have zero clue how to explain why my T4 is so much larger than my salary when there were no bonus payouts last year.
    that's how our purchase plan works - the "free/discounted" shares are actually taxable benefits so we pay taxes on them the same way as it would be income.

    that said, our company does withhold taxes on this taxable benefit, but they withhold it on the same cheque as our yearly bonus - that way we don't really notice the extra taxes since we are getting an abnormally big cheque anyways.

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    Originally posted by sabad66

    that's how our purchase plan works - the "free/discounted" shares are actually taxable benefits so we pay taxes on them the same way as it would be income.

    that said, our company does withhold taxes on this taxable benefit, but they withhold it on the same cheque as our yearly bonus - that way we don't really notice the extra taxes since we are getting an abnormally big cheque anyways.
    Well shit, CRA started requiring this in 2011.

    Greedy fuckers.

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    Originally posted by 403ep3
    Paying taxes = technically the better option because you got a loan of $3k at 0% (kind of)

    whereas, getting a refund means you just gave a 0% loan to the government.
    Just don't go over that $3K or they throw you on the installment plan.

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    Originally posted by nzwasp
    I wish she would just get taxed correctly by her company so we wouldnt have to go through this BS every friggin year.
    If you have to pay, you basically got a interest free loan from the government.

    If you have a refund, you basically gave a interest free loan to the government.

  17. #37
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    Originally posted by realazy
    What's everyone's rush to get taxes done so early?

    You have 2 years to file if you don't owe taxes.
    For me it's knowing how much to put into RRSP to offset the amount of taxes I owe. My taxes are done already as I got my last slip just last night for wife's school stuff, and the last T5 from the bank.

    This year sucks the most, as I closed down my corporation and paid out a large dividend.
    Attached Images Attached Images

  18. #38
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    Originally posted by suntan
    Typically, the company will tax the bonus at the employee's highest tax rate (not even their marginal).
    This is how my bonus is taxed

  19. #39
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    Originally posted by nzwasp
    I wish she would just get taxed correctly by her company so we wouldnt have to go through this BS every friggin year.

    The payroll deductions are based upon the TD1 which she probably filled out when she started working. She should fill out a new TD1 if she wants more deductions for each pay period.

    http://www.cra-arc.gc.ca/E/pbg/tf/td1/td1-17e.pdf
    Has an IQ of 138, but can't figure out basic algebra.

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    Originally posted by ExtraSlow
    Wonder when the government of canada will send me the T4 for my EI so I can see how badly they screwed up the tax withholding on their own money . . .
    Login or set up a mycra account t4e were avaliable February 1st
    Originally posted by Unknown303
    Everything makes me upset.
    Originally posted by Mibz
    Nonsense. You've all got slanty eyes, play Starcraft, speak Chinese and eat nothing but sushi and ginger beef.

    DON'T TRY AND CONVINCE ME OTHERWISE

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