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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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50% - Moderately

Income Tax


Synonyms:dues, fee, imposed contribution, tax contribution
Filed Under: financial-banking, taxation
Tags: banking, taxes
 

Definition of income tax

income tax
1. A tax that is levied by the Federal Government and by some Provincial or Municipal Governments on the annual income of an individual or a company. The amount or percentage taxed is based on the amount of an individual's earned and unearned income, using the government's graduated tax scale.

Related Terms and Acronyms:

  • Canada Pension Plan (CPP)   A public pension plan administrated by the Canadian government.
  • electronic filing (EF, NETFILE)   Taxpayers can now file their tax information with personal computers and tax preparation software. The information goes directly to Revenue Canada and they can directly deposit refunds into the taxpayer's bank account.
  • household income (HHI)   The total income of all members of a household.
  • Notice of Assessment (NOA)   A form the federal government issues when personal taxes are complete. A notice of assessment shows a breakdown of the given years income along with the balance owing or refund.
      ➥  Canada Revenue Agency's T451 tax form.
  • old age security (OAS)   A Canadian pension plan for eligible Canadians over the age of 65.
  • ordinary income   Income that does not qualify as a capital gain including wages, interest, dividends, and net income from a business.
  • payroll taxes   A tax based on wages and salaries that is deducted from employees pay cheques.
  • recognized gain or loss   The amount of gain or loss reported for income tax purposes. You may be able to defer recognizing gain or loss on certain property exchanges, such as like-kind exchanges.
  • short tax year   A tax period less than 12 months long, resulting from a business start-up or the transition to a tax year ending on a different date.
  • tax credit (TC)   Tax credits are used to reduce the amount of the tax owed. Tax credits are more valuable than deductions because they directly reduce the amount of tax owed, rather than reducing the amount of income that is taxed.

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