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25 Cards in this Set
- Front
- Back
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Personal income taxes |
Taxes imposed on income earned |
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Excise taxes |
Special taxes levied on certain consumer products such as cigarettes and alcohol |
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Capital assets |
Any asset that is acquired and held for the purpose of generating income |
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Mill rate |
Tax rate multiplied by property value that determines property tax |
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Employment insurance (EI) |
Government benefits that are payable fit periods of time when you are away from work due to specific situations - parental leave, illness, injury, layoff |
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T4 slip |
A succulent provided to you by your employer that displays your salary and all deductions associated with your employment associated with that specific employer for the previous year. Employer required to provide this by February 28 |
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Total income |
All reportable income from any source, including salary, wages, commissions, business income, government benefits, pension income, interest income, dividend income, and taxable capital gains received during the tax year; income from outside Canada also included |
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Interest income |
Interest earned from investments in various types of savings accounts at financial institutions |
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T5 slip |
A document provided to you when you receive income other than salary income |
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Dividend income |
Income received from corporations in the form of dividends paid on stock or on mutual funds that hold stock; represents profit due to part owners of the company |
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Capital gain |
Money earned when you sell an asset at a higher price than you paid for it |
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Capital loss |
Occurs when you sell an asset for less than you paid for it |
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Deduction |
An item that can be deducted from total income to determine taxable income; I.e. RRSPs, union dues, child care expenses |
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Net income |
The amount remaining after subtracting deductions from your total income |
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Marginal tax rate |
Percentage of tax you pay on your next dollar of taxable income; based on income level stages |
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Average tax rate |
Amount of tax you pay as a percentage of your total taxable income |
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Tax credits |
Specific amounts used to directly reduce tax liability |
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Refundable tax credit |
Portion of the credit that is not needed to reduce your tax liability (because it is already 0) may be paid to you |
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Non-refundable tax credit |
The portion of the credit that is not needed to reduce your tax liability will not be paid to you and cannot be carried forward to reduce your tax liability in the future |
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Clawback |
Used to reduce a particular government benefit provided to tax payers who have income that exceeds a certain threshold amount |
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Tax planning |
Involves activities and transactions that reduce or eliminate tax |
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Tax avoidance |
Occurs when taxpayers legally applying tax law to reduce our eliminate texts payable in ways that the CRA considers potentially abusive of the spirit of the Income Tax Act |
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Tax evasion |
Occurs when taxpayers attempt to deceive the CRA by knowingly reporting less tax payable than what the law obligates then to pay |
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Educational assistance payment (EAP) |
The amount paid to a beneficiary from an RESP |
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Tax Free Savings Account (TFSA) |
A registered investment account that allows you to purchase investments, with after-tax dollars, without attracting any tax payable on your investment growth |
