RE:RE:RE:RE:RE:RE:How Much Would You Pay In TaxesGreat articulation!
NeedAPool wrote: I understand what you are saying but...when you input the amount into a tax calculator as a capital gain, it taxes it differently than when you input it as income (I tried it both ways.)
Assuming it is taxed as income and not taxable gains, it is Important to note that when you say 33% and 13%, that is only on the amount above $216k federally and $220k provincially. The amounts below that number would be taxed at:
Federally
Up to $48535 15%. $7280
$48535 - $97069 20.5%. $9950
$97069 - $150,473 26%. $13855
$150,472 - $214,368. 29%. $18530
$214,368 and up 33% (using $500k this works out to be 33% of $285,632) = $94258
For federal total tax owed would be $143,903
Provincially
Up to $44740 5.05% $2259
$44740 - $89,482. 9.15%. $4094
$89,482 - $150,000. 11.16%. $6754
$150,000 - $220,000. 12.16%. $8512
$220,000 and up 13.16% (using $500k this works out to be 13.16% of $280,000) = $36,848
For provincial total tax owed would be $58,467
So if the gains on a margin tax is calculated as income then the total tax for federal plus provincial would be $202,370. Still not bad considering it started as $1m!!!
For note I just tried another online income tax calculator. This time I used Turbo Tax. When I put income in as $0 and capital gains as $500,000 it shows me tax owing of $96,002. If I put $500,000 in as income it gives me $228,729 which is different than the other calculator AND different than the manual calculation using the federal and provincial percentages.
Moral of the story...always talk to a professional. Hire an accountant!!!! :D