Tax Savings Estimator

Instructions

Users may enter data into the white spaces on the screen. Numbers should be rounded to the nearest dollar, and no commas should be entered. Calculate button will cause the Results to appear in the RESULTS area. To ensure correct results, you must press the Clear and Reset button before entering new inputs.

General Information:

Family Status: Two types of family situations are recognized:

Single for taxation purposes – which may include single, divorced, separated, or widowed legal status. The code for Single status is [ 1 ].

Married for taxation purposes includes "common-law" partnerships – code[ 2 ]. The term spouse may also include a common-law partner.

Age: It is assumed the Higher Income Taxpayer is at least 18 years of age. For Married status, the Spouse is deemed to be at least 18 years old and 3 years younger than the Higher Income Taxpayer, unless the spouse's age is entered. For a Higher Income Taxpayer or Spouse age 65 or over, Old Age Security Pension of $4,960 –the 1999 level– is automatically included.

Dependent children: In the case of Married status, the Higher Income Taxpayer is the taxpayer with the higher net income –total income less deductions from total income. This taxpayer must be the one to claim dependent children for purposes of the Family Tax Reduction. If the Higher Income Taxpayer is Single, it is assumed that the first dependent child will be claimed for the full value of an "Equivalent to Spouse" amount for taxation purposes.

Disability Amounts: A maximum of two disability amounts can be claimed by the Higher Income Taxpayer; the two claims can be for (a) dependent child(ren) or one for the taxpayer and one for a dependent child. A disability amount can also be claimed for a Spouse.

Income Information:

The user may input various types of income.

Earned income means employment income (wages or salary). Canada Pension Plan and Employment Insurance premiums will be estimated and appropriate non-refundable credits calculated. There is no provision for self-employment income.

Pensions other than Old Age Security Pension (OASP) or Canada Pension; up to $1,000 of these "other pensions" are eligible for the pension income non-refundable tax credit. Users can report Canada Pension in "Other Income".

Investment income means interest and other investment income besides capital gains and taxable Canadian dividend income.

Canadian Dividends: The actual "cash value" should be reported. The Estimator © will "gross-up" the amount to its taxable value, and allow a dividend tax credit. There are two types of dividends, "eligible" and "other-than-eligible" dividends. Eligible dividends are generally those paid by public corporations resident in Canada and subject to the general corporation income tax rate. In addition, Canadian Controlled Private Corporations (CCPCs) will be able to pay eligible dividends to the extent that their income (other than investment income) is subject to tax at the general corporation income tax rate. Other-than-eligible dividends include those paid by CCPCs and subject to the small business tax rate.

Capital gains: the "actual gain" should be entered. The taxable value will be calculated.

Deductions:

Three types of deductions are allowed.

Deductions from Total income reduce the amount of the taxpayer's income before the Net income stage. These deductions can include registered pension plan contributions, registered retirement savings plans, union dues, child care expenses, moving expenses.

Deductions from Net income include "Other payments" deductions – for Guaranteed Income Supplements, Workers Compensation and Social Assistance payments. Northern residents' deductions are also deducted here.

Charitable donations are included in the non-refundable tax credit calculations.

Housing Information:

The Estimator © will report the increase in the Manitoba Education Property Tax Credit that can be claimed by an eligible tenant or homeowner.

The user can specify whether or not the Higher Income Taxpayer claims an Education Property Tax Credit, and whether as a tenant or homeowner.

Results:

The results report the taxable income, and provincial tax payable for both Higher Income Taxpayer and Spouse, and the family total income tax. Changes in the family total from the 1999 tax level are shown. If the user claims an Education Property Tax Credit, the increased value of the credit in relation to 1999 is deducted from the family income tax total. Commencing with the 2009 taxation year, the increased value of the Personal Tax Credit is also deducted from the family income tax total.