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2014 Personal Tax Increases for High Income Earners

While Canadian corporate tax rates remain competitive (enter Burger King) personal income tax rates for high income earners in Ontario have increased and more individuals will subject to a top rate of nearly 50%. In addition, the highest personal tax bracket in 2014 (49.53%) will apply to individuals earning over $220,000 (down from $509,000 in 2013). This means income earned in 2014 in excess of $220,000 but below $509,000 will be subject to an additional 3.12% of tax relative to 2013. The chart below illustrates these changes:

Taxable Income Chart

How much more will I pay in 2014?*

Ex 1. An individual earning $500,000 in 2014 will pay $9,800 more than they did in 2013.

Ex 2. An individual earning $300,000 in 2014 will pay $3,600 more than they did in 2013.

Ex 3. An individual earning $200,000 in 2014 will pay $800 more than they did in 2013.

Tax Planning Solutions

Various strategies (like income splitting) may help you lower your family’s overall tax liability. Please contact a Stern Cohen LLP advisor to discuss what tax planning opportunities may be available to you.

*Our examples assume an individual resident in Ontario has earned the same amount of taxable income in 2014 and 2013. All amounts have been rounded.