Changes coming in 2022 Federal Income Tax

Changes for 2022 Tax Year The Canada Revenue Agency offers three federal benefits to every Canadian: 

• Basic personal amount (BPA) tax credit
• Minimum taxable amount
• Age amount tax credit

 All three amounts will increase in 2022. Here is how much tax benefit you will get based on income. 

• The CRA increased BPA by $590 to $14,398 for 2022, on which the minimum federal tax rate of 15% won’t apply. In other word, you do not pay federal income tax on the first $14,398 you made in 2022 when it comes to 2022 income tax filling. You will pay federal tax on excess income after $ 14,398 exemption under (BPA). This will save you $2,160 (15% of $14,398) in the federal tax bill, provided your 2022 taxable income is less than $155,625.
• The CRA has also increased the minimum taxable amount by $1,177 to $50,197. If your taxable amount is below this threshold, a 15% federal tax rate will apply.
• If you are above 65 years of age, the CRA offers you an age amount tax credit. The CRA has increased the 2022 age amount by $185 to $7,898, which will reduce your federal tax bill by $1,185 (15% of $7,898). 

For instance, Lisa’s 2021 and 2022 taxable income remains unchanged at $50,197. The above three tax breaks would reduce her federal tax bill by $302. There are many more tax credits Lisa can use to reduce her tax owing. But that is discussion for another day. Stay tune for more