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For the Ontario providers out there -- how much did you owe for CPP/Income tax for 2014 (or 2013)? I feel like I owe more than I should and I'm wondering if my accountant is claiming things properly. Also if you don't mind putting what your gross income was so I can compare. Thanks!:)
My gross income for 2014 was $40025.00 and my accountant is saying I owe $4350.00 for CPP & Income Tax.
It depends on so many other factors than gross income. Write offs and RRSP contributions affect what you owe.
The CPP payment is often quite high as you are required to pay both the employee and employer contributions as a self employed person. This CPP payment is often the largest part of my tax bill.
Often a provider who has been in business for awhile doesn't have major write offs other than groceries/supplies so they end up paying more tax.
You can check to make sure your accountant has used all possible deductions.
One thing to keep in mind though, the RRSP deductions do decrease your taxes for the year but they don't affect the CPP amount. I have started to pay in instalments throughout the year, whether it is required or not, that way it doesn't always have to come in one big chunk in the spring.
Your numbers are almost exactly what I made and what I paid for 2013. :( It hurt - a lot....but I guess if you make over 40 K then eventually the tax man comes knocking.
I budgeted the same amount to pay back this year but I have been scared to go in and do the taxes. :blink::blink:
@soshell-my numbers were almost the same as yours last year, and I paid $4500 in tax.
@soshell-my numbers were almost the same as yours last year, and I paid $4500 in tax.
oops-guess I hit post twice LOL!
Gulp...i am afraid to see what my return is going to look like. in 2013 i made 15,000 or so and i paid about 600. This year i made over 20,000 (Haven't submitted yet though)....i know it's not as much as some other providers, is that why, because i made less money? We have RRSP's, RESP's, i claim all applicable deductions, etc.
So many things can affect the amount you pay. Some years I've had lots of expenses, and others not. Also personal expenses like medical not covered by a private plan/your kid's sports activities/summer camp/daycare or preschool for your kids(if they went elsewhere a few days a week) /were you in post secondary education etc/did you do major repairs on your car or house etc./RESP's.
Some of my first years in the business, my clients were sporadic, and even though I might have made about $25000 gross, my business startup costs were high, and we had family expenses as well, so we actually got a refund. You never know how it'll work out.
Question....does anyone write off cable or internet?
Gross income and tax owed not comparable. Married vs single make difference. Dependant children make difference. Number of dependant make difference. Cost of running one house vs different house make difference. Provision of food vs not make difference. Mortgage interest rate makes difference. Own health insurance make difference. Heating cost make differences. Property tax bill make difference. Sq footage used for day care make difference. Power useage make difference. Water useage make difference. House insurance cost makes difference. Spousal income make difference.
Too many variable to get any real comparable.
I write off a portion of my internet
I put cable and internet into the business use of home calculation meaning it is available to me during daycare hours and used by the family in non daycare hours.