Personal tax accountant in Toronto

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.

A tax calculated on a tax

Most provinces tax income at set rates, less credits. Ontario then adds a tiered surtax calculated on basic provincial tax above set levels: a tax on tax, which matters more than it sounds.

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 additional dollar of provincial tax costs more than the marginal rate implies.

Why this matters more for dividends

A dividend is grossed up, then reduced by a dividend tax credit. With a simple rate-times-income structure, the two steps offset predictably. In Ontario, the gross-up raises taxable income, basic provincial tax and the surtax; the dividend tax credit then reduces provincial tax and the surtax together.

The effects do not cancel neatly, so the salary-dividend crossover sits elsewhere in Ontario than in a province without a surtax. An owner who relocates with the same remuneration policy does not keep the same outcome.

The health premium is a separate line

Ontario also charges a health premium through personal income tax, set in steps by taxable income. It is not reducible by credits in the ordinary sense and not part of the surtax. It responds to taxable income, including the grossed-up amount of a dividend rather than the cash received, so it reacts to the mix of income, not only its size. The gross-up differs for eligible and non-eligible dividends.

The federal half is the same everywhere

None of this touches the federal return, which is identical for every resident of Canada. Federal law is national and the provincial layer is a defined schedule on top, so what must be right is that schedule and its credits. See Ontario tax facts and salary versus dividends.

Getting the sequence right

All of this is decided before the return is prepared. The amount and form of remuneration is set around the corporate year-end, and by filing season the surtax, the premium and the credits are simply consequences. The useful work therefore happens in the autumn for a December year-end, or in the month before the corporate year-end for anyone else. That is also why one preparer for both returns matters more in Ontario than in a province with a flatter provincial 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
• Corporate return prepared on the same file
• Instalment review and CRA correspondence

Remote, and there is no Toronto office

EverStone has no Toronto location. Engagements run entirely online — video meetings, e-signature and secure document upload, and personal income tax is federal legislation with a provincial schedule on top, so preparation is not tied to a local address.

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