Taxation Basics Overview

These flashcards cover key vocabulary terms related to taxation, business entities, and personal tax concepts discussed in the lecture.

Deduction

A deduction reduces the amount of income that is subject to tax.

Tax Credit

A tax credit reduces the amount of tax owed, not the taxable income.

Proprietorship

A business entity owned and run by a single individual reporting income on personal tax returns.

Filing Deadline

The specific date by which a tax return must be filed to avoid penalties.

Business Number (BN)

A 9-digit number assigned to businesses for transactions with the CRA.

RRSP

Registered Retirement Savings Plan; a savings plan that allows tax deferment.

GST

Goods and Services Tax; a value-added tax on most goods and services.

ITC

Input Tax Credit; the amount of GST a business can claim back.

Employee vs. Self-Employed

Employees work for a business and receive a salary, while self-employed individuals run their own businesses.

CPP

Canada Pension Plan; a retirement savings plan for Canadian workers.

Political Donation Credit

A 75% tax credit on the first $400 donated to political parties or candidates.

Charitable Donation Credit

A tax credit for donations to approved charities, varying by income level.

Farm Statement

A form (T2042) filed with personal tax returns reporting farming income.

Tax Bracket

A range of income levels that defines the rate at which income is taxed.

Personal Tax Calculations

Calculations determining an individual's tax liability based on income and deductions.