{"id":495,"date":"2023-09-03T18:33:55","date_gmt":"2023-09-03T22:33:55","guid":{"rendered":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/?post_type=chapter&#038;p=495"},"modified":"2024-11-04T08:34:53","modified_gmt":"2024-11-04T13:34:53","slug":"taxes-the-mammoth-price-tag","status":"publish","type":"chapter","link":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/chapter\/taxes-the-mammoth-price-tag\/","title":{"raw":"Taxes: The Mammoth Price Tag","rendered":"Taxes: The Mammoth Price Tag"},"content":{"raw":"Bills, bills, bills!!!\u00a0 There always seems to be a never ending cycle of invoices due.\u00a0 In <a href=\"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/part\/ii-the-money-mindset\/\" target=\"_blank\" rel=\"noopener\"><em>Chapter 2 \u2013 The Money Mindset<\/em><\/a> we discussed categorizing expenses between needs, wants, and savings.\u00a0 It was suggested to allocate 50% of expenses to needs, which is a significant amount of the budget and covers items such as accommodation, food, and transportation.\u00a0 Rent, groceries, and vehicle costs are usually thought of as the most expensive items to individuals.\u00a0 However, taxes are probably an individual\u2019s largest expense and as such should receive heightened attention. In future chapters we will discuss apprentice tax credits and tax advantaged accounts. Our objective in this chapter is to build an understanding of how the Canadian taxation system affects you. We have listed some of the common types of taxes that individuals are subject to.\r\n\r\n<strong><em>Income Tax<\/em><\/strong>\r\n<ul>\r\n \t<li>Relates to the taxes owing primarily on earnings. Individuals calculate the income tax owing to [pb_glossary id=\"654\"]Canada Revenue Agency (CRA)[\/pb_glossary] each year on an [pb_glossary id=\"652\"]Income tax and benefit return (T1)[\/pb_glossary].\u00a0 The amount of income tax to pay depends on your income during the year and the [pb_glossary id=\"650\"]tax credits[\/pb_glossary] you have available to claim.\u00a0 A separate federal and provincial or territorial tax calculation is made.\u00a0 In some provinces, the top tax bracket combined federal and provincial tax rate is greater than 50% of earnings.<\/li>\r\n<\/ul>\r\n<strong><em>Sales Tax<\/em><\/strong>\r\n<ul>\r\n \t<li>Relates to taxes paid on most goods and services purchased. In Canada, 3 different types of sales tax exist: goods and services tax (GST), provincial sales tax (PST), and harmonized sales tax (HST).<\/li>\r\n<\/ul>\r\n<strong><em>Property Tax<\/em><\/strong>\r\n<ul>\r\n \t<li>Municipal (local) governments calculate these taxes based on the value of land and buildings.<\/li>\r\n<\/ul>\r\n<strong><em>Custom Duties and Tariffs<\/em><\/strong>\r\n<ul>\r\n \t<li>These taxes are charged by the federal government on certain imported and exported products.<\/li>\r\n<\/ul>\r\n<strong><em>Health Services Taxes<\/em><\/strong>\r\n<ul>\r\n \t<li>Provinces and territories are responsible for managing their own health care system. Some provinces\/territories charge additional amounts to access these services.<\/li>\r\n<\/ul>\r\nThese are some of the taxes that individuals regularly pay during the course of a year.\u00a0 The percentage of these taxes surmount to a significant portion of gross earnings.\r\n<div class=\"textbox textbox--examples\"><header class=\"textbox__header\">\r\n<p class=\"textbox__title\">Example: Determination of Taxes<\/p>\r\n\r\n<\/header>\r\n<div class=\"textbox__content\">\r\n\r\nAmber has received her Red Seal Endorsement and is working as an Automotive Service Technician in Prince Edward Island.\u00a0 Amber works full-time with an annual employment salary of $80,000 as issued on her T4 slip.\u00a0 Amber has a single family home in Charlottetown, PEI, which is assessed at $450,000 and subject to 1.5% property tax annually.\u00a0 During the year, Amber also incurred the following expenses not including taxes:\r\n<ul>\r\n \t<li>Meals (15% HST)\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0$2,600<\/li>\r\n \t<li>Non-alcoholic beverages (15% HST)\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0$1,000<\/li>\r\n \t<li>Goods &amp; Services subject to HST\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0$ 12,000<\/li>\r\n \t<li>Shipped goods from outside Canada (18% Duty, 15% HST)\u00a0 \u00a0 \u00a0$ 800<\/li>\r\n \t<li>Fuel (30% fuel taxes)\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $6,000<\/li>\r\n<\/ul>\r\nAmber will have the following approximate taxes:\r\n<ul>\r\n \t<li>Federal Tax $10,262<\/li>\r\n \t<li>Provincial Tax \u00a0\u00a0\u00a0 8,540<\/li>\r\n \t<li>Canada Pension Plan (CPP) \u00a0\u00a0\u00a0\u00a03,755<\/li>\r\n \t<li>Employment Insurance (EI) premium \u00a0\u00a0\u00a0 1,002<\/li>\r\n<\/ul>\r\nTotal Employment Income Taxes\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $23,559\r\n\r\nTotal Income Taxes (% of gross income $80K)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 29.45%\r\n\r\n&nbsp;\r\n<ul>\r\n \t<li>Property Tax @ 1.5% assessment $6,750<\/li>\r\n \t<li>15% HST on meals \u00a0\u00a0\u00a0\u00a0 390<\/li>\r\n \t<li>15% HST on non-alcoholic beverages \u00a0\u00a0\u00a0\u00a0 150<\/li>\r\n \t<li>15% HST on goods &amp; services \u00a0 1,800<\/li>\r\n \t<li>15% HST on shipped goods \u00a0\u00a0\u00a0\u00a0 120<\/li>\r\n \t<li>18% duty on shipped goods \u00a0\u00a0\u00a0\u00a0 108<\/li>\r\n \t<li>30% fuel taxes \u00a0 1,800<\/li>\r\n<\/ul>\r\nTotal Other Taxes\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $11,118\r\n\r\n&nbsp;\r\n\r\nTotal Taxes\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $34,677\r\n\r\nTotal Taxes (% of gross income $80K)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0 43.35%\r\n\r\n&nbsp;\r\n\r\nAmber will pay $34,677 of taxes during the year, approximately 43.3% of her gross employment income.\r\n\r\n<\/div>\r\n<\/div>\r\n&nbsp;\r\n\r\n&nbsp;\r\n\r\nLinks to a few tools to assist in estimating amount of income taxes owing\r\n<ul>\r\n \t<li><a href=\"https:\/\/www.wealthsimple.com\/en-ca\/tool\/tax-calculator\" target=\"_blank\" rel=\"noopener\">Wealthsimple<\/a><\/li>\r\n \t<li><a href=\"https:\/\/www.eytaxcalculators.com\/en\/2024-personal-tax-calculator.html\" target=\"_blank\" rel=\"noopener\">EY Personal Tax Calculator<\/a><\/li>\r\n \t<li><a href=\"https:\/\/turbotax.intuit.ca\/tax-resources\/canada-income-tax-calculator?srsltid=AfmBOopgTCJzUTR9gT_ueVlBpM7V-J3mouk_W9-jOqU3WZkLPsfYG0c4\" target=\"_blank\" rel=\"noopener\">Turbo Tax<\/a> - Canada Income Tax Calculator<\/li>\r\n \t<li><a href=\"https:\/\/www.taxtips.ca\/calculators\/canadian-tax\/canadian-tax-calculator.htm\" target=\"_blank\" rel=\"noopener\">TaxTips.ca<\/a> - Canadian Tax &amp; RRSP Saving Calculator<\/li>\r\n<\/ul>\r\nWith tax commonly Canadian\u2019s largest expense, it is essential to have an understanding of the Canadian income tax system on route to a journey towards financial freedom.\r\n<h2 style=\"text-align: center\"><span style=\"color: #0000ff\"><em>\u201cIt\u2019s not how much you can make, but how much you can keep.\u201d<\/em><\/span><\/h2>\r\n&nbsp;\r\n\r\nFamiliarity of tax laws and tax planning strategies can assist one in minimizing their tax liability legally.\u00a0 Being able to keep more of one's gross earnings allows one to have the ability to save more, set realistic financial goals, and take advantage of tax-efficient options.\u00a0 This, in turn, will allow one to accumulate a growing wealth of assets over time, accelerating the road towards financial independence.\r\n\r\n&nbsp;","rendered":"<p>Bills, bills, bills!!!\u00a0 There always seems to be a never ending cycle of invoices due.\u00a0 In <a href=\"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/part\/ii-the-money-mindset\/\" target=\"_blank\" rel=\"noopener\"><em>Chapter 2 \u2013 The Money Mindset<\/em><\/a> we discussed categorizing expenses between needs, wants, and savings.\u00a0 It was suggested to allocate 50% of expenses to needs, which is a significant amount of the budget and covers items such as accommodation, food, and transportation.\u00a0 Rent, groceries, and vehicle costs are usually thought of as the most expensive items to individuals.\u00a0 However, taxes are probably an individual\u2019s largest expense and as such should receive heightened attention. In future chapters we will discuss apprentice tax credits and tax advantaged accounts. Our objective in this chapter is to build an understanding of how the Canadian taxation system affects you. We have listed some of the common types of taxes that individuals are subject to.<\/p>\n<p><strong><em>Income Tax<\/em><\/strong><\/p>\n<ul>\n<li>Relates to the taxes owing primarily on earnings. Individuals calculate the income tax owing to <a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_495_654\">Canada Revenue Agency (CRA)<\/a> each year on an <a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_495_652\">Income tax and benefit return (T1)<\/a>.\u00a0 The amount of income tax to pay depends on your income during the year and the <a class=\"glossary-term\" aria-haspopup=\"dialog\" aria-describedby=\"definition\" href=\"#term_495_650\">tax credits<\/a> you have available to claim.\u00a0 A separate federal and provincial or territorial tax calculation is made.\u00a0 In some provinces, the top tax bracket combined federal and provincial tax rate is greater than 50% of earnings.<\/li>\n<\/ul>\n<p><strong><em>Sales Tax<\/em><\/strong><\/p>\n<ul>\n<li>Relates to taxes paid on most goods and services purchased. In Canada, 3 different types of sales tax exist: goods and services tax (GST), provincial sales tax (PST), and harmonized sales tax (HST).<\/li>\n<\/ul>\n<p><strong><em>Property Tax<\/em><\/strong><\/p>\n<ul>\n<li>Municipal (local) governments calculate these taxes based on the value of land and buildings.<\/li>\n<\/ul>\n<p><strong><em>Custom Duties and Tariffs<\/em><\/strong><\/p>\n<ul>\n<li>These taxes are charged by the federal government on certain imported and exported products.<\/li>\n<\/ul>\n<p><strong><em>Health Services Taxes<\/em><\/strong><\/p>\n<ul>\n<li>Provinces and territories are responsible for managing their own health care system. Some provinces\/territories charge additional amounts to access these services.<\/li>\n<\/ul>\n<p>These are some of the taxes that individuals regularly pay during the course of a year.\u00a0 The percentage of these taxes surmount to a significant portion of gross earnings.<\/p>\n<div class=\"textbox textbox--examples\">\n<header class=\"textbox__header\">\n<p class=\"textbox__title\">Example: Determination of Taxes<\/p>\n<\/header>\n<div class=\"textbox__content\">\n<p>Amber has received her Red Seal Endorsement and is working as an Automotive Service Technician in Prince Edward Island.\u00a0 Amber works full-time with an annual employment salary of $80,000 as issued on her T4 slip.\u00a0 Amber has a single family home in Charlottetown, PEI, which is assessed at $450,000 and subject to 1.5% property tax annually.\u00a0 During the year, Amber also incurred the following expenses not including taxes:<\/p>\n<ul>\n<li>Meals (15% HST)\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0$2,600<\/li>\n<li>Non-alcoholic beverages (15% HST)\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0$1,000<\/li>\n<li>Goods &amp; Services subject to HST\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0$ 12,000<\/li>\n<li>Shipped goods from outside Canada (18% Duty, 15% HST)\u00a0 \u00a0 \u00a0$ 800<\/li>\n<li>Fuel (30% fuel taxes)\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 $6,000<\/li>\n<\/ul>\n<p>Amber will have the following approximate taxes:<\/p>\n<ul>\n<li>Federal Tax $10,262<\/li>\n<li>Provincial Tax \u00a0\u00a0\u00a0 8,540<\/li>\n<li>Canada Pension Plan (CPP) \u00a0\u00a0\u00a0\u00a03,755<\/li>\n<li>Employment Insurance (EI) premium \u00a0\u00a0\u00a0 1,002<\/li>\n<\/ul>\n<p>Total Employment Income Taxes\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $23,559<\/p>\n<p>Total Income Taxes (% of gross income $80K)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 29.45%<\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li>Property Tax @ 1.5% assessment $6,750<\/li>\n<li>15% HST on meals \u00a0\u00a0\u00a0\u00a0 390<\/li>\n<li>15% HST on non-alcoholic beverages \u00a0\u00a0\u00a0\u00a0 150<\/li>\n<li>15% HST on goods &amp; services \u00a0 1,800<\/li>\n<li>15% HST on shipped goods \u00a0\u00a0\u00a0\u00a0 120<\/li>\n<li>18% duty on shipped goods \u00a0\u00a0\u00a0\u00a0 108<\/li>\n<li>30% fuel taxes \u00a0 1,800<\/li>\n<\/ul>\n<p>Total Other Taxes\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $11,118<\/p>\n<p>&nbsp;<\/p>\n<p>Total Taxes\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $34,677<\/p>\n<p>Total Taxes (% of gross income $80K)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0 43.35%<\/p>\n<p>&nbsp;<\/p>\n<p>Amber will pay $34,677 of taxes during the year, approximately 43.3% of her gross employment income.<\/p>\n<\/div>\n<\/div>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>Links to a few tools to assist in estimating amount of income taxes owing<\/p>\n<ul>\n<li><a href=\"https:\/\/www.wealthsimple.com\/en-ca\/tool\/tax-calculator\" target=\"_blank\" rel=\"noopener\">Wealthsimple<\/a><\/li>\n<li><a href=\"https:\/\/www.eytaxcalculators.com\/en\/2024-personal-tax-calculator.html\" target=\"_blank\" rel=\"noopener\">EY Personal Tax Calculator<\/a><\/li>\n<li><a href=\"https:\/\/turbotax.intuit.ca\/tax-resources\/canada-income-tax-calculator?srsltid=AfmBOopgTCJzUTR9gT_ueVlBpM7V-J3mouk_W9-jOqU3WZkLPsfYG0c4\" target=\"_blank\" rel=\"noopener\">Turbo Tax<\/a> &#8211; Canada Income Tax Calculator<\/li>\n<li><a href=\"https:\/\/www.taxtips.ca\/calculators\/canadian-tax\/canadian-tax-calculator.htm\" target=\"_blank\" rel=\"noopener\">TaxTips.ca<\/a> &#8211; Canadian Tax &amp; RRSP Saving Calculator<\/li>\n<\/ul>\n<p>With tax commonly Canadian\u2019s largest expense, it is essential to have an understanding of the Canadian income tax system on route to a journey towards financial freedom.<\/p>\n<h2 style=\"text-align: center\"><span style=\"color: #0000ff\"><em>\u201cIt\u2019s not how much you can make, but how much you can keep.\u201d<\/em><\/span><\/h2>\n<p>&nbsp;<\/p>\n<p>Familiarity of tax laws and tax planning strategies can assist one in minimizing their tax liability legally.\u00a0 Being able to keep more of one&#8217;s gross earnings allows one to have the ability to save more, set realistic financial goals, and take advantage of tax-efficient options.\u00a0 This, in turn, will allow one to accumulate a growing wealth of assets over time, accelerating the road towards financial independence.<\/p>\n<p>&nbsp;<\/p>\n<div class=\"glossary\"><span class=\"screen-reader-text\" id=\"definition\">definition<\/span><template id=\"term_495_654\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_495_654\"><div tabindex=\"-1\"><p>agency that administers tax, benefits, and related programs to ensure compliance on behalf of governments across Canada, thereby contributing to the ongoing economic and social well-being of Canadians<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_495_652\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_495_652\"><div tabindex=\"-1\"><p>the Canadian tax return that individuals complete every year to calculate whether they owe tax on their income.\u00a0 A return must also be completed and submitted to Canada Revenue Agency to receive federal and provincial or territorial benefits and credits.<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><template id=\"term_495_650\"><div class=\"glossary__definition\" role=\"dialog\" data-id=\"term_495_650\"><div tabindex=\"-1\"><p>amounts that help reduce the taxes that you owe<\/p>\n<\/div><button><span aria-hidden=\"true\">&times;<\/span><span class=\"screen-reader-text\">Close definition<\/span><\/button><\/div><\/template><\/div>","protected":false},"author":1780,"menu_order":4,"template":"","meta":{"pb_show_title":"on","pb_short_title":"Taxes: The Mammoth Price Tag","pb_subtitle":"","pb_authors":["anne-lee"],"pb_section_license":"cc-by-nc-nd"},"chapter-type":[48],"contributor":[61],"license":[58],"class_list":["post-495","chapter","type-chapter","status-publish","hentry","chapter-type-standard","contributor-anne-lee","license-cc-by-nc-nd"],"part":145,"_links":{"self":[{"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/pressbooks\/v2\/chapters\/495","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/wp\/v2\/users\/1780"}],"version-history":[{"count":18,"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/pressbooks\/v2\/chapters\/495\/revisions"}],"predecessor-version":[{"id":1315,"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/pressbooks\/v2\/chapters\/495\/revisions\/1315"}],"part":[{"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/pressbooks\/v2\/parts\/145"}],"metadata":[{"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/pressbooks\/v2\/chapters\/495\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/wp\/v2\/media?parent=495"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/pressbooks\/v2\/chapter-type?post=495"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/wp\/v2\/contributor?post=495"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/pressbooks.bccampus.ca\/financialfreedomfortrades\/wp-json\/wp\/v2\/license?post=495"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}