As everyone knows, the new budget was put into place. For weeks, we had heard about tough cuts. However, when the budget was eventually released, the cuts are not really so tough (at least not for businesses). But there certainly were increased tax items that will affect you as a business owner.
As with most political budgets, there is a lot of controversy and media sensationalism about what is good, what is bad about this particular budget. Consumers like you and I, however, just want the “skinny” on how it affects us.
The Alberta government did a great website link that is written in clear, easy to understand English.
http://alberta.ca/budget-revenue-explained.cfm#revenuechanges
However, for most business, there are 2 basic changes which will affect your business.
Here are the major highlights, as they will affect you.
- Your corporate tax rates did not change. There were comments made that increasing corporate tax rates which oil prices are low would force a spiralling recession.
- Your personal tax rates may increase by up to 1.5%. For those that are making over $100,000 per year, you will not pay more tax over that mark. Income planning with your bookkeeper or accountant will be more essential. How you get your money out of your company will be more significant.
- Health care insurance premiums will commence, and the tax system will be used to collect them. There is a statement “Payment will be collected through payroll withholdings and instalments, where applicable. In other circumstances, payment will be made when filing personal income tax returns.” which indicates that there will be payroll deductions (in addition to CPP/EI), however that has not yet been made clear to us as bookkeepers and accountants.
There are many more changes to your personal taxes. However we focused on the ones that will affect your business, and what you will have to change in your business.