Below are the tax rates for Ontario individuals effective for the 2019 year. In making informed decisions about tax planning strategies for medical doctors, you need to consider your current and projected tax bracket. The objective of tax planning strategies is to avoid paying tax in the highest Ontario tax brackets ($150,000+, $210,371 + and $220,000+).
Planning opportunities may include RRSP contributions, tax deferral within a professional corporation, and income splitting. The table below shows the Federal and Provincial marginal tax rates ( the percentage of tax paid on the last dollar of income or on additional income).
Combined Ontario/Federal Income Taxes Payable by Individuals at Various Levels of Taxable Income — 2019
| Taxable Income | Marginal Tax Rate |
|---|---|
| 0 – $12,069 | 0.00% |
| $12,070 – $43,906 | 20.05% |
| $43,907 – $47,630 | 24.15% |
| $47,631 – $77,317 | 29.65% |
| $77,318 – $87,813 | 31.48% |
| $87,814 – $91,098 | 33.89% |
| $91,099 – $95,259 | 37.91% |
| $95,260 – $147,667 | 43.41% |
| $147,668 – $150,000 | 46.41% |
| $150,001 – $210,371 | 47.97% |
| $210,372 – $220,000 | 51.97% |
| $220,001 + | 53.53% |
Want help making the right decisions for your current or future year’s tax liability? MDtax would be happy to help. Elliott Stone, CPA, CA, is the founder of MD Physician Tax Services in Toronto. Email us at: [email protected]