Tuesday, October 30, 2007

Federal income tax cuts

There's been a lot of talk about whether we would be seeing tax cuts with the fall fiscal update, and it's now official.

The following personal tax measures are being introduced:
  • The federal basic personal amount (the maximum income you can make without paying any federal income tax) is being raised from $8,929 to $9,600, retroactive to January 1, 2007, and continuing through 2008. The limit will increase to $10,100 for 2009.

  • The lowest personal income tax rate (paid on income between $9,600 and $37,178) is being reduced from 15.50% to 15.00%.

  • The GST is being knocked down another point to 5%.
I'm excited about the income tax measures. Basically, if you make over $37,178, the change will save you $241.90 in income tax for 2007. The GST reduction will also be handy, although I now have to learn to calculate 13% tax in my head, just when I had 14% figured out!

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