1. What is Canadian Federal Tax?

Canadian federal tax is the portion of income tax that goes to the national government. It's calculated based on taxable income after deductions, using progressive tax brackets with different rates applied to portions of your income.

2. How Does the Calculator Work?

The calculator uses the basic federal tax formula:

Where:

• \( Taxable\ Income \) — Income after all deductions ($)
• \( Federal\ Rate \) — Applicable tax rate (decimal)
• \( Credits \) — Total tax credits available ($)

Explanation: The calculator applies the tax rate to your income then subtracts any tax credits you're eligible for.

3. Importance of Tax Calculation

Details: Accurate tax estimation helps with financial planning, ensuring you set aside enough money for tax payments and can take advantage of all available credits.

4. Using the Calculator

Tips: Enter your taxable income in dollars, the applicable federal tax rate (e.g., 0.15 for 15%), and any tax credits. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are the current federal tax brackets?
A: For 2023: 15% on first $53,359, 20.5% up to $106,717, 26% up to $165,430, 29% up to $235,675, and 33% above that.

Q2: What are common tax credits?
A: Basic personal amount, Canada employment amount, medical expenses, charitable donations, and tuition credits.

Q3: Should I use my marginal or effective tax rate?
A: For accurate calculations, use the specific rate for each portion of your income according to tax brackets.

Q4: Are provincial taxes included?
A: No, this calculator only estimates federal tax. Provincial taxes are calculated separately.

Q5: When are federal taxes due?
A: Typically April 30 for most individuals, or June 15 if you or your spouse are self-employed.