Personal tax accountant in Markham

A personal return covers the T1 with slips such as the T4 and T5, RRSP and TFSA room, rental income on the T776 and business income on the T2125.

Who we prepare returns for in Markham

Most of the Markham returns we prepare belong to people whose income does not arrive on a single T4. Owners of incorporated consultancies and technology companies take a mix of salary and dividends. Professionals hold shares in a professional corporation. Families own a rental unit or a basement apartment alongside the home. Newer residents may still hold investments or property outside Canada. The City of Markham describes itself as Canada’s most diverse community, and that shows up on returns: foreign income, foreign tax credits and foreign property reporting are routine rather than unusual here.

A single T4 with nothing else is a job for free filing software, and we will say so rather than quote. Where the return is shaped by a corporation, a rental, self-employment on the T2125 or assets abroad, it pays to have the same CPA who sees the corporate file prepare the personal one.

A tax calculated on a tax

Most provinces compute personal tax by applying rates to taxable income and subtracting credits. Ontario does that and then adds a surtax computed as a percentage of the basic provincial tax payable itself, in tiers, once that amount passes defined levels. The distinction between a tax on income and a tax on tax sounds academic and is not.

Because the surtax multiplies provincial tax rather than income, anything that increases provincial tax increases the surtax with it, and anything that reduces provincial tax — including non-refundable credits applied before the surtax is computed — reduces the surtax as well. A credit in Ontario is therefore worth more than its face rate suggests, and an extra dollar of provincial tax costs more than the marginal rate implies. For a Markham household, that makes the placement of credits between spouses, such as medical expenses, donations and pension splitting, worth a careful look each year.

Why this matters more for dividends

A dividend is grossed up before tax is calculated and then reduced by a dividend tax credit. In a province with a simple rate-times-income structure, those steps largely offset in a predictable way. In Ontario, the gross-up raises taxable income, which raises basic provincial tax, which raises the surtax; the dividend tax credit then reduces provincial tax and the surtax together.

The two effects do not cancel neatly, so the crossover between paying salary and paying dividends sits in a different place in Ontario than in a province without a surtax. The distinction between eligible and non-eligible dividends changes the size of the gross-up, and most small Markham corporations pay non-eligible dividends out of income taxed at the small-business rate. The salary versus dividends calculator is a useful first pass.

The health premium is a separate line

Ontario also levies a health premium through the personal income tax system, calculated by reference to taxable income in steps rather than proportionally. It is not part of the surtax calculation. For an owner, the practical point is that it responds to taxable income, including the grossed-up amount of a dividend rather than the cash received. It is another item that reacts to the composition of income, not only its size.

Family members on the payroll or the share register

Family companies are common in Markham, with spouses, parents and adult children working in the business or holding shares. Paying a family member a reasonable salary for real work is ordinary and deductible. Paying dividends to family shareholders is where the tax on split income applies: unless an exception fits, those dividends can be taxed at the top rate on the recipient’s T1. The exceptions turn on age, hours worked and the type of shares held. Tax on split income sets out the tests, and the corporate side is covered on corporate tax in Markham.

Rental units, foreign assets and the forms that follow

A rental unit is reported on the T776, with expenses split between current repairs and capital improvements that go to CCA. Claiming CCA on a principal residence that is partly rented needs care, because it can affect the principal residence exemption later. Foreign property with a total cost above the reporting threshold is disclosed on the T1135, foreign pensions and investment income are reported in Canadian dollars, and foreign tax already paid is claimed as a credit rather than ignored. Each of these is mechanical once the facts are known; the risk is in not knowing which ones apply. Current versus capital rental expenses covers the most common judgement.

Getting the sequence right

All of this is decided before the return is prepared. The amount and form of an owner’s pay is set around the corporate year-end, and by filing season the surtax, the premium and the credits are simply consequences. The useful work happens in the autumn for a December year-end, or in the month before the corporate year-end otherwise. Self-employed filers have until June 15 to file but must pay by April 30, and anyone with a large balance two years running is likely to receive instalment reminders. That is why one preparer for both returns matters more in Ontario than in a province with a flatter structure.

What is covered

One Chartered Professional Accountant handles the whole file:

• T1 preparation with the full Ontario provincial schedule
• Surtax and health premium effects modelled before remuneration is set
• Salary and dividend mix reviewed against the provincial structure
• Rental income, T2125 business income and foreign income and credits
• Corporate return prepared on the same file where there is one
• Instalment review and CRA correspondence

Remote, with no office in Markham

EverStone has no Markham location. Engagements run entirely online — video meetings, e-signature on the T183 and secure document upload. Personal income tax is federal legislation with a provincial schedule on top, so preparation is not tied to a local address. As your authorized representative we download your slips from the CRA directly, which removes most of the chasing. See Ontario tax facts for the provincial figures, or our Toronto accountant page for the nearest large-city practice.

The moment there are employees, payroll in Markham becomes the recurring obligation.