Income Taxes

Expenses  Other/Not on a regular basis:  Estimate how frequently they occur and calculate an approximate value for the month; or  Record expenses over a period of time and average them to gain a more accurate vlaue.  Other/Not on a regular basis:  Estimate how frequently they occur and calculate an approximate value for the month; or  Record expenses over a period of time and average them to gain a more accurate vlaue.

What is Tax?  Tax is a mandatory payment made by individuals and corporations to government.  It can based upon things such as income, property and sales.  Taxes are used to support the government and the programs and services it provides  Tax is a mandatory payment made by individuals and corporations to government.  It can based upon things such as income, property and sales.  Taxes are used to support the government and the programs and services it provides

 Since the beginning of recorded history, some kind of tax system has existed in organized societies and governments. Over 3,500 years ago, the ancient Egyptians collected taxes and the Roman Empire had a highly evolved tax system.  The French and Romans of the 13th century were credited with the first use of a word similar to tax. The French had taxer and the Latin used taxare to describe the acts: to estimate, to assess, or to touch repeatedly  Since the beginning of recorded history, some kind of tax system has existed in organized societies and governments. Over 3,500 years ago, the ancient Egyptians collected taxes and the Roman Empire had a highly evolved tax system.  The French and Romans of the 13th century were credited with the first use of a word similar to tax. The French had taxer and the Latin used taxare to describe the acts: to estimate, to assess, or to touch repeatedly

Strange Tax Trivia  and-Abroad/INF12163.html and-Abroad/INF12163.html  Fun Trivia -  The narrowest house in Amsterdam is approximately 180 cm wide, which was actually less than the height of the average Dutch person. Historically, property in Amsterdam was taxed based on the width, which is why many houses are so narrow and deep.  A “Jock” tax was first levied in California in 1991 when a tax official realised that the winning team in the NBA finals was not from California and each of the winning players was to be given a huge amount of money as a bonus. He felt that, since those players had earned that money in California, it should be taxed there.  Centuries ago, when the Papal State dominated Tuscany, the rulers imposed an extremely high tax on salt. As a form of protest, Tuscan bakers began to make their bread without salt. To this day, Tuscan bread is saltless. Peter the Great of Russia, once taxed beards (1705). There were also taxes on boots, beehives, basem  and-Abroad/INF12163.html and-Abroad/INF12163.html  Fun Trivia -  The narrowest house in Amsterdam is approximately 180 cm wide, which was actually less than the height of the average Dutch person. Historically, property in Amsterdam was taxed based on the width, which is why many houses are so narrow and deep.  A “Jock” tax was first levied in California in 1991 when a tax official realised that the winning team in the NBA finals was not from California and each of the winning players was to be given a huge amount of money as a bonus. He felt that, since those players had earned that money in California, it should be taxed there.  Centuries ago, when the Papal State dominated Tuscany, the rulers imposed an extremely high tax on salt. As a form of protest, Tuscan bakers began to make their bread without salt. To this day, Tuscan bread is saltless. Peter the Great of Russia, once taxed beards (1705). There were also taxes on boots, beehives, basem

Why pay taxes?  The government collects taxes to pay for the facilities, services, and programs that it provides. We pay taxes on our income and most goods and services. Canada's tax system pays for such things as roads, education, health care, national defence, police and fire services, parks and playgrounds,libraries, garbage collection and many other programs and services.  Tax revenue also helps redistribute wealth to benefit lower-income families, students, seniors, and people with disabilities. Tax revenue funds social programs such as old age security, Canada child tax benefit, universal child care benefit, and working income tax benefit.  The government collects taxes to pay for the facilities, services, and programs that it provides. We pay taxes on our income and most goods and services. Canada's tax system pays for such things as roads, education, health care, national defence, police and fire services, parks and playgrounds,libraries, garbage collection and many other programs and services.  Tax revenue also helps redistribute wealth to benefit lower-income families, students, seniors, and people with disabilities. Tax revenue funds social programs such as old age security, Canada child tax benefit, universal child care benefit, and working income tax benefit.

Types of taxes  GST/HST/PST  We pay GST/HST on most of what we purchase, except:  ■ basic groceries;  ■ prescription drugs and medical devices;  ■ most healthcare, medical, and dental services;  ■ residential rents, including university residences and boarding houses;  ■ residential housing other than new;  ■ local or municipal bus services and passenger ferry services;  ■ legal aid services;  ■ most banking services; and  ■ most educational services including tuition fees.  GST/HST/PST  We pay GST/HST on most of what we purchase, except:  ■ basic groceries;  ■ prescription drugs and medical devices;  ■ most healthcare, medical, and dental services;  ■ residential rents, including university residences and boarding houses;  ■ residential housing other than new;  ■ local or municipal bus services and passenger ferry services;  ■ legal aid services;  ■ most banking services; and  ■ most educational services including tuition fees.

Direct or Indirect  Taxes are either direct or indirect.  Direct taxes are paid by the taxpayer directly to the government. They include personal income tax, property tax, corporate tax, and estate tax.  Indirect taxes are paid by the taxpayer to a third-party (such as a retail store) who remits the tax to the government. They include sales tax, goods and services tax (GST), harmonized sales tax (HST), fuel tax, and tobacco tax.  Examples ??  Income tax, tobacco tax, gst/hst, property tax  Taxes are either direct or indirect.  Direct taxes are paid by the taxpayer directly to the government. They include personal income tax, property tax, corporate tax, and estate tax.  Indirect taxes are paid by the taxpayer to a third-party (such as a retail store) who remits the tax to the government. They include sales tax, goods and services tax (GST), harmonized sales tax (HST), fuel tax, and tobacco tax.  Examples ??  Income tax, tobacco tax, gst/hst, property tax

Tax obligations of a new employee  SIN  TDI – Personal Tax Credits Return  Statement of Earnings  T4 (February  Personal Income Tax due April 30  SIN  TDI – Personal Tax Credits Return  Statement of Earnings  T4 (February  Personal Income Tax due April 30

The City  Luna:  University student, low income, T4 – part time job, she will get a refund  Nikos  18 year old worker, T4 from job and T202 tuition receipt, low income, student last year, only worked a few weeks, get a refund  Rio  20 years old, full time worker, 2 x T4’s  Gaia  45 year old café owner, T4 income from full time job, she is self employed business owner, Gaia would not necessarily receive a T4, but she works as an employee and payers her self, taxes are paid differently for her business  Luna:  University student, low income, T4 – part time job, she will get a refund  Nikos  18 year old worker, T4 from job and T202 tuition receipt, low income, student last year, only worked a few weeks, get a refund  Rio  20 years old, full time worker, 2 x T4’s  Gaia  45 year old café owner, T4 income from full time job, she is self employed business owner, Gaia would not necessarily receive a T4, but she works as an employee and payers her self, taxes are paid differently for her business  Sienna  20 year old part time worker, 2 x T4’s from part time jobs  Indigo  25 university grad, T4 from full time employment  Liam  25 year old college grad, T4 income from full time job  Zack  45 year old professional, T5 investments, T2202 tuition receipt for daughter at university, NO T4, why?

Overview  Submit a T1 return, claim back any excess that was collected or pay any unpaid taxes.  Taxes are not deducted from some sources of income, including investment income, self employment, and contract work.  Submit a T1 return, claim back any excess that was collected or pay any unpaid taxes.  Taxes are not deducted from some sources of income, including investment income, self employment, and contract work.

Shelters  Registered Retirement Savings Plans (RRSP)  Allow taxpayers to defer paying income tax until retirement (when they may be able to pay a lower tax rate)  Registered Education Saving Plan (RESP)  Allow taxpayers to shift the tax to a student (who may be able to pay a lower rate, or pay no taxes at all)  Registered Retirement Savings Plans (RRSP)  Allow taxpayers to defer paying income tax until retirement (when they may be able to pay a lower tax rate)  Registered Education Saving Plan (RESP)  Allow taxpayers to shift the tax to a student (who may be able to pay a lower rate, or pay no taxes at all)  Tax Free Saving Account (TFSA)  is a flexible, registered, general-purpose savings vehicle that allows Canadians to earn tax-free investment income to more easily meet lifetime savings needs.

How often? When?  Pose the questions: How often do individuals file tax returns? Why is it important to file a tax return?  Remind students of the responsibility that Canada’s self-assessment tax system places on Canadians by emphasizing the following three statements:  1) Canada’s tax system is based on the principle of self-assessment, which means that individuals complete an income tax and benefit return to report their annual income. Every year, Canadians file close to 27 million individual returns.  2) In order to receive certain federal and provincial or territorial benefits such as the GST/HST credit and the Canada child tax credit (CCTB), taxpayers must file a return every year even if they have no income to report.  3) Taxpayers file returns to determine if they have paid the proper amount of taxes for the year. If they paid too much, they will receive a refund. If they didn’t pay enough, they will have a balance owing to pay the CRA.  Pose the questions: How often do individuals file tax returns? Why is it important to file a tax return?  Remind students of the responsibility that Canada’s self-assessment tax system places on Canadians by emphasizing the following three statements:  1) Canada’s tax system is based on the principle of self-assessment, which means that individuals complete an income tax and benefit return to report their annual income. Every year, Canadians file close to 27 million individual returns.  2) In order to receive certain federal and provincial or territorial benefits such as the GST/HST credit and the Canada child tax credit (CCTB), taxpayers must file a return every year even if they have no income to report.  3) Taxpayers file returns to determine if they have paid the proper amount of taxes for the year. If they paid too much, they will receive a refund. If they didn’t pay enough, they will have a balance owing to pay the CRA.

Tax Assignment  3 Booklets  4 x T1’s  3 Booklets  4 x T1’s

Resources  file:///C:/Users/Christa/Downloads/Teacher%20Manual%202013%20tis18-13e.pdf file:///C:/Users/Christa/Downloads/Teacher%20Manual%202013%20tis18-13e.pdf  Videos:  Canadian Students:  Saskatchewan General -  file:///C:/Users/Christa/Downloads/Teacher%20Manual%202013%20tis18-13e.pdf file:///C:/Users/Christa/Downloads/Teacher%20Manual%202013%20tis18-13e.pdf  Videos:  Canadian Students:  Saskatchewan General -