Just before the approaching tax season of 2025, citizens of Ontario are all set to file their 2024 tax returns with the Canada Revenue Agency (CRA).
The official start of tax season ushers in February 24, 2025, with online filing available through the NETFILE. The regular deadline for filing tax return documents for most people is April 30, 2025.
Self-employed individuals have until June 16, 2025, to file, but regardless, they must remit any taxes by April 30 to avoid applicable penalty fees.
Federal Income Tax Brackets for 2024 (filing in 2025)
The following brackets are derived for the 2024 tax year by the Federal Government:
| Taxable Income Range | Tax Rate |
|---|---|
| Up to $55,867 | 15% |
| $55,867.01 to $111,733 | 20.5% |
| $111,733.01 to $173,205 | 26% |
| $173,205.01 to $246,752 | 29% |
| Over $246,752 | 33% |
The federal Basic Personal Amount is $15,705 for individuals with net incomes of under $173,205. The BPA applies to individuals with incomes between over $173,205 but less than $246,752, which amounts to $14,156. If there is a higher income that exceeds $246,752, this will also apply.
It is a tax-exempt credit for the amount deductible as per the law under the Federal Income Tax Act. For example, applying the 15% tax rate, the highest credit available from the BPA will equal to $2,355.75 ($15,705 × 15%).
Ontario: Provincial Income Tax Brackets for 2024 (Filing in 2025) The following are the provincial tax brackets for Ontario under the year 2024:
| Taxable Income Range | Tax Rate |
|---|---|
| Up to $51,446 | 5.05% |
| $51,446.01 to $102,894 | 9.15% |
| $102,894.01 to $150,000 | 11.16% |
| $150,000.01 to $220,000 | 12.16% |
| Over $220,000 | 13.16% |
The provincial Basic Personal Amount (BPA) for 2024 is $12,399. At a very low rate of tax of 5.05%, this corresponds to a credit of $626.15 ($12,399 × 5.05%).
How Progressive Tax Brackets Work
Within a progressive tax system, only that part of your income within each bracket is taxed at that rate. Take, for example, an income of $60,000.
Federal Tax Calculation:
- First $55,867 taxed at 15% $8,380.05
- $4,133 remaining ($60,000-$55,867) taxed at 20.5% $847.77
- Federal Tax Total $9,227.82
- Ontario Provincial Tax Calculation:
- First $51,446 taxed at 5.05% $2,598.37
- $8,554 remaining ($60,000-$51,446) taxed at 9.15% $783.70
- Total Provincial Tax: $3,382.07
- Combined Total Tax: $12,609.89
After being reduced by the federal and provincial BPAs, taxable income reduces the overall tax liability.
Important Dates Concerning the 2025 Tax-Filing Season
- February 24, 2025: The CRA opens for filing 2024 returns via NETFILE.
- April 30, 2025: For most Canadians, this is the deadline to file taxes and pay any amounts owed.
- June 16, 2025: Self-employment individuals have extended filing deadlines (taxes owed by these people are still due by April 30).
- Filing taxes earlier minimizes penalties and speeds refunds. Use of CRA’s NETFILE makes it easy to file with refund issuance taking about 2 to 3 weeks, while paper filing may take 8 weeks or longer.
Suggestions for Lowering Your Tax Payable
- Make Full Use of RRSP Contributions: The limit for RRSPs is $31,560 going into 2024, or 18 percent of earned income in 2023, whichever is lower. Contributions will therefore reduce your taxable income.
- Claim Tax Credits: Available credits that should be looked into include the Medical Expense Tax Credit, Canadian Child Benefit, and disability tax credits.
- Use Tax Software: Programs like TurboTax or Wealthsimple will help in calculations and deductions.
- Hire a Tax Professional: These may be useful in complicated scenarios furled by self-employment and rental income.
- Understanding the consolidated federal and Ontario tax brackets in 2024 is key for financial planning.
Establishing base parameters for your taxation gives you the room to amend withholding, maximize deductions, and avert any surprises. Whether your income is $30,000 or $500,000, if you know the taxes imposed on your earnings, you will make an informed financial decision.
FAQS:
In other words, how do tax brackets actually function in Ontario?
An Ontario tax system is progressive, meaning that only that piece of your income earned within each bracket is taxed at that particular rate. Due to lower income portions possessing lower rates, whereas the higher income portion incurs a higher tax rate.
When is the last date for filing 2024 taxes in Ontario?
The official kick-off for tax-filing season is February 24, 2025. Generally, the deadline for most Canadians is April 30 of that year. Self-employed individuals can file their taxes until June 16 of that year but must pay any taxes owed by April 30 to avoid a penalty.