The 2001 Federal Budget and Mini Budget of October 17, 2000 bring in some more good news and changes affecting most taxpayers across the board. In addition to tax rate reductions, it also increases income brackets for different tax rates. Some of the major changes affecting the individuals are summarized below:

Full Protection Against Inflation in the Tax System – The budget continues full indexation against inflation which started last year. Areas affecting individual taxpayers are as follows:

• Basic Personal Amount (Line 300) increased to $7,412
• Age Amount (Line 301) increased to $3,619 – Transferable to spouse
• Spousal Amount (Line 303) increased to $6,294. Same for Equivalent - to-spouse amount (Line 305).
• Disability Amount (Line 316) increased to $6,000. Supplement available $3,500 reduced by child care expenses claimed.
• Interest re Student Loan (Line 316) Actual $ paid - No change.

Benefits to individuals in terms of income are: 

• Scholarship, bursary and study grant - $3,000 exempt from tax.
• Education amount has been doubled - $200 to $400/month for Full-time and $60 to $120/month for part-time students.
• Taxable Capital Gains reduced to 50% for full year

Other improvements in deductible items are:

• Child Care Expenses (Line 214) Claim for a disabled child under 7 year old is maintained at $10,000.
• Attendant Care Expenses (Line 215) increased to $3,500.
• National Child Benefit Supplement will increase by $300 per child to a maximum of $2,372 for the first child, with corresponding increases for additional children.

TAX RATE AND BRACKETS

One more tax bracket has been added to reduce the federal income tax. Tax rates and revised tax brackets are:

First  $30,754 taxable income            -            tax rate is reduced from 17% to 16%

Next  $30,754 taxable income            -            tax rate is reduced from 24% to 22%

Next  $38,492 taxable income            -            tax rate is reduced from 29% to 26%

Over  $100,000 taxable income          -            tax rate is 29%

5% Surtax has been eliminated completely

ONTARIO INCOME TAX

Beginning 2001, the government of Ontario has started charging Ontario Income Tax on Net Income which is called TONI (Tax On Net Income). The Payroll Deduction Tables provide both Federal and Ontario Income Tax tables.