1. TAXES CALM 20

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

3. Important Definitions Registered retirement savings plan (RRSP): You can make tax deductible contributions to an RRSP to build a fund for your retirement. Withdrawals from the plan are taxable. Tax-free Savings Account (TFSA): A registered account that allows you to set money aside tax-free. Contributions are not tax deductible. Income earn in the account is generally tax-free, even when it is withdrawn Taxpayer: Every person or entity that is required to comply with the legislation administered by the CRA, including individuals, businesses, benefit recipients, charities, etc. Working Income Tax Benefit (WITB): A refundable tax credit for eligible working low-income individuals

4. History of Taxes Since the beginning of recorded history, some kind of tax system has existed in organized societies and governments. Over 3500 years ago, the ancient Egyptians collected taxes and the Roman Empire had a highly evolved tax systems. The French and the Romans of the 13 th Century were credited with the firs 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.

5. Canada’s Tax System Many of the services and benefits we enjoy are made possible through taxes. We pay taxes on our income and on most goods and services we purchase in Canada. The government collects these taxes to pay for such things as roads and highways, hospitals, education, health care, national defense, police, and fire services, parks and playgrounds, libraries, garbage collection, and many many other programs and services.

6. Tax revenue also helps redistribute wealth to benefit lower-income families, student, seniors, and people with disabilities by funding social programs such as old age security, Canada child tax benefit, universal child care benefit, and working income tax benefit.

7. Types of Taxes GST/HST/PST Taxes are either direct or indirect Direct taxes: Are paid directly to the government. They include personal income tax, property tax, corporate tax, and estate tax Indirect taxes: Are paid 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

8. GST The Goods and Services Tax (GST) is a 5% tax that applies to most good and services in Canada. In some provinces there are two taxes: GST & PST. Some provinces combine the two to make HST (harmonized sales tax) We pay GST on most of what we purchase: Groceries Banking Services Clothing

9. Completing our Taxes Many different types of Services! Lots of Banking firms will offer to do your taxes for a cost College/University may have a program where the accounting students may do your taxes for you Paper forms Online Forms (last year more than 75% of income tax returns were filed electronically) Netfile (www.netfile.gc.ca)www.netfile.gc.ca www.cra.gc.ca/videogallery