As a Canadian taxpayer, it is important to understand the concept of Total Payable. This refers to the amount of tax that an individual owes to the government after all the applicable credits have been deducted from the total tax payable. In this blog post, we will discuss everything you need to know about Total Payable.
What is Total Payable?
Total Payable is the final amount of tax owed by an individual to the government after all applicable credits and deductions have been taken into account. It is calculated based on an individual’s total taxable income and tax rate. The amount owed can be reduced through various tax credits and deductions, which we will discuss in more detail below.
Calculating Total Payable
The formula for calculating Total Payable is relatively simple. First, an individual’s total taxable income is calculated by subtracting all eligible deductions from their total income. Then, this amount is used to determine the individual’s tax rate based on the current tax brackets. Finally, all applicable tax credits are deducted from the tax owed to arrive at the Total Payable amount.
Tax Credits
As mentioned above, tax credits can be used to reduce the amount of tax owed. There are several types of tax credits available to Canadians, including:
- Basic Personal Amount – This is a non-refundable tax credit available to all Canadians. It is intended to provide a basic level of tax relief to all taxpayers.
- Canada Employment Amount – This tax credit is available to individuals who are employed and earning income.
- Disability Tax Credit – This credit is available to individuals who have a severe and prolonged mental or physical impairment.
- Medical Expense Tax Credit – This credit is available to individuals who have paid for medical expenses not covered by their provincial health care plan.
- Charitable Donation Tax Credit – This credit is available to individuals who have made charitable donations to registered charities.
These are just a few examples of the tax credits available to Canadians. It is important to speak with a tax professional to determine which credits you may be eligible for.
Conclusion
In summary, Total Payable refers to the final amount of tax owed by an individual to the government after all applicable credits have been taken into account. This amount can be reduced through various tax credits and deductions. It is important for Canadians to understand the concept of Total Payable in order to properly manage their taxes and minimize the amount owed to the government. If you have any questions about Total Payable or other tax-related topics, it is recommended to consult with a tax professional.