Nobody wants to think about their taxes until tax time but here we are in the last quarter of the year already and for some they are scrambling around to see how they can make it so the current year will have less of an impact on them come tax filing time. This is the type of exercise that should begin right at the start of a new year.
Another issue that some begin to pay attention to before the year ends is if there are going to be any tax changes taking place, or are already in place that could change their upcoming tax obligations.
For the year 2014 perhaps the hardest hit with a tax change are those in the high income bracket. For many they may be giving a sigh of relief that this isn’t going to affect them. However, if you are enthusiastic about your future and have inclinations to push yourself into the higher tax bracket then you certainly want to pay attention to what is happening now.
Now to begin with just what are we referring to when it comes to a high income? Basically it is those that are earning over $150,000 yearly. For those who own medium sized business you may have a few employee’s in this income bracket and if so then you need to know about the new tax changes.
What it comes down to is simply being hit with a higher tax rate which is being implemented as of September of 2014. Of course this means the implementation of a new tax bracket to conform with the increased tax rate.
If you are thinking that least you won’t get hit with this new tax hike prior to September this is wrong, because it is going to be retroactive for all income earners of $150,000+ plus going back to January 2014.
So if you make between $150,000-$220,000 for the year you can expect to pay an extra 3% tax for the months of September to December, 2014. For those making between $220,000 to $514,090 they are looking at paying a 6% increase for those same months.
Moving forward once the dust has settled it gets simple. In 2015 the increase is 1% for those between $150,000 to $220,000 and 2% for the $220,000 to $514,090 earners.
You may be thinking where did all of this take place, but it was originally defeated from becoming legislation in May 2014, and was the main cause of the new provincial election. Once that didn’t work then the Liberal’s went ahead with their plans and passed this new legislation in May also giving approval for it be retroactive from January 1st, 2014.
