Earnings Loss Benefit (ELB) Increase to 90%

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ELB INCREASE MATH

Post by Dannypaj on Tue 01 Mar 2016, 12:38

There has been a lot of talk about changes to Canada's personal income tax rules, both throughout the long election campaign in 2015 and during the months since the Liberals took power.
Some, such as the means-tested Child Care Benefit meant to replace the Universal Child Care Benefit are not yet even drafted, though they are anticipated in this year's budget.
Others, such as the higher tax bracket for people who earn over $200,000, and lower taxes for those earning $45,283 to $90,563, are already making an impact on pay packets.

■2016 tax season: Special report
■'Family tax cut' on its way out, but still plenty of helpful ways to divvy your income
■CRA: General return tax guide

Experts such as Jason Safar, a partner in tax services at PWC Canada, advise doing some planning around those changes in tax rates, especially for those earning over $200,000.
"If I'm a top-rate taxpayer, it may make sense for me not to take advantage of discretionary deductions in 2015," he said, adding that it's a matter of getting advice and crunching the numbers.

Federal marginal tax rates

Income 2015 2016
$45,282 or less 15% 15%
$45,283 to $90,563 22% 20.5%
$90,564 to $140,38826% 26% 26%
$140,389 to $200,000 29% 29%
Over $200,000 29% 33%


ELB = 43,283

Here is an increase of 15% to your ELB.  Now you moved into a higher tax bracket, so your 15% is already slashed by moving you into the next tax bracket, in turn taking 8% off or at the lowest end 5.5% off your newly 15% increase to the ELB.
Food for thought. IDK if that is right and please do not hesitate to correct me if I am wrong.


Last edited by Dannypaj on Tue 01 Mar 2016, 14:51; edited 2 times in total
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Re: Earnings Loss Benefit (ELB) Increase to 90%

Post by Trooper on Tue 01 Mar 2016, 13:58

Danny..if your sole income is ELB an it is at $43,283 ..an you are bumped up 15% as promised .. it would put you into the next tax bracket.

It is also true that you would lose 5.5% ..but you would also gain 9.5% of your total ELB.
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Re: Earnings Loss Benefit (ELB) Increase to 90%

Post by Dannypaj on Tue 01 Mar 2016, 14:17

My sole income is the ELB that it that is all. So 9.5% of $43,283 is $4,111 more a year. $342.00 more a month ? That may keep me a float and it is better then a kick in the ass I guess.
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Re: Earnings Loss Benefit (ELB) Increase to 90%

Post by johnny211 on Tue 01 Mar 2016, 16:46

Dannypaj - All good pts, but who the heck knows if the ELB/EELB increase will happen this budget. One can only hope..VVV..
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Re: Earnings Loss Benefit (ELB) Increase to 90%

Post by bigrex on Wed 02 Mar 2016, 09:00

Well, the new 90% ELB, based on the $43283, would be just over $51939, but since only the amounts above $45283 would be taxed at the higher rate, you should still see approx $7000 of the ELB increase in your pocket.
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Re: Earnings Loss Benefit (ELB) Increase to 90%

Post by Guest on Wed 02 Mar 2016, 10:50

good numbers bigrex . just kinda want to point out that we are assuming that the elb figure is pre tax witch is important in the math as it seems bigrex has done . I would also like to point out that the tax rates are not on INCOME but TAXABLE INCOME ie ; last line of your tax return before tax rate calculations . everyone's taxes are different with different deductions but at least throw in the basic personal amount before you try to get a rough figure .

I think its around 11,327 for this year so just subtracting that alone from your INCOME gives you 40612.9 in TAXABLE INCOME .

just some things to consider that's all.

propat

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Re: Earnings Loss Benefit (ELB) Increase to 90%

Post by Guest on Wed 02 Mar 2016, 10:58

danny unless im missing some important info if this is pre tax income bigrexes $51939 is good and since this is your sole income your tax bracket will not jump .

propat


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Re: Earnings Loss Benefit (ELB) Increase to 90%

Post by 6608 on Wed 02 Mar 2016, 13:46

Propat, the basic personal amount (11327) is not used to lower your taxable income its only a tax credit used to reduce your federal tax bit of a difference in numbers. anyone in the example would still have their tax level increased.


Most of us dont really have many options to reduce our total income, other than RRSP contrbutions and in our case this year legal fee’s. (the house always wins)


Cheers
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Re: Earnings Loss Benefit (ELB) Increase to 90%

Post by Recon031 on Wed 02 Mar 2016, 14:23

Please Correct me if i'm wrong .............

Here in Ontario , To reduce income we can Claim ........

1. Monthly federal tax paid in ........................................... $ 0000.00
2. Property Taxes ........................................................... $ 0000.00
3. DTC , disability tax credit ............................................. $ 8001.00
4. Dental Claims for family .............................................. $ 0000.00
5. Monthly payments for dental insurance ......................... $ 400.00
6. Monthly payments for PSHCP ....................................... $ 500.00
7. Childrens fitness Tax Credits ........................................ for Sports $ 000.00
8. Your Spouse $ 11474 - her income ............................... $ 0000.00
9. Personal Exemption .................................................... $ 11,474.00
10. Manulife Class Action Tax .......................................... $ 5050.89
11. Manulife Class Action Legal Fees ................................ $ 1851.18
12. Our 5 Children ......................................................... $ 10,600.00

Just to name some , IT'S IN THE 10'S OF THOUSANDS ........... NO SHIT .............. i'm not putting certain amounts as it's " Personal Business "

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Re: Earnings Loss Benefit (ELB) Increase to 90%

Post by pinger on Wed 02 Mar 2016, 15:48

Thanks for the list recon, makes me stop and think what I'm overlooking.
Let alone my tax guy.

So now I'm thinking Trooper... could a layman's tax/math thread/new topic
in csat be a helpful kind of thing? Perhaps not if we are different worms in the same can.
Something like that. Just a thought.

I want an accountant in my back pocket... Sad
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Re: Earnings Loss Benefit (ELB) Increase to 90%

Post by Guest on Wed 02 Mar 2016, 16:02

opps sory 6608 normally read before I type . right you are its just a credit only worth about 1,699 in bottom line tax savings federally slightly less than it would if it were a deduction due to the increase in the tax rate past the $43283 amount if they have absolutely no other deductions .

my bad

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Re: Earnings Loss Benefit (ELB) Increase to 90%

Post by Trooper on Wed 02 Mar 2016, 16:17

Back to Danny's first post...his sole income is $43,283

Add the 15% bump up to the ELB to that....which comes to $49,775

As he shows the new tax brackets ....$45,283 to $90,563 22% 20.5%

So in the above change tax bracket has changed from 22% to 20.5%

So now that the bump up of 15% has put him from a tax bracket of 15% into a new tax bracket of 20.5%

A difference of 5.5%

So he now gets tax wise an increase of 9.5% in total for his ELB...15% BUMP UP - 5.5% NEW TAX BRACKET CHANGE.

9.5% of $43,283 = $4111 extra he will get from his 15% ELB bump up.

$4111 divided by 12 = $342 extra per Month when all is said an done.

Pinger your talking topic ..not category right ?
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Re: Earnings Loss Benefit (ELB) Increase to 90%

Post by Guest on Wed 02 Mar 2016, 16:30

recon great stuff no need for correction . what 6608 was getting at was in the way it is calculated . tax credits are not really a deduction per say. yes they have the same effect for those on in the lowest tax bracket and those who end up paying no taxes. they do not effect your tax bracket as I incorrectly stated but do lower your tax burden if you have any.

you are correct thou many tax credits and some deductions out there as you have shown that can lower your taxable income and tax burden . thanks for that .

propat

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Re: Earnings Loss Benefit (ELB) Increase to 90%

Post by Guest on Wed 02 Mar 2016, 16:33

trooper $51939 would be the correct amount .

propat

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Re: Earnings Loss Benefit (ELB) Increase to 90%

Post by Guest on Wed 02 Mar 2016, 16:48

that would be an increase of $8110 before tax .

propat

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