Now that you have knowledge of Canada tax rate, the next step is to learn how to calculate tax refund should you qualify for one. For taxable income, you have to subtract total deductions from your total income. For calculating tax on taxable income, you have to multiply taxable income to average tax rate. For total tax payable, you have to sum up all tax credits that are non-refundable and multiple it by 0.15. For tax refund, you have to subtract your total tax paid and refundable credits from your total paid tax.
Looking at the different calculation ways, it can be intimidating and overwhelming, especially for newbies. However, you will get the hang of it sooner than you’ll know it. Many people would resort to using online tax calculator as it makes things easier. Some entrust the task in the hands of experts such as accountants. Just make sure that you know how to calculate five numbers mentioned above, which are the average tax rate, income tax paid, total deductions, total taxable income, and total credits times 0.15. Again these numbers take some time to master calculating, but it is a good thing that aside from tax professionals, you can rely on online tax calculators. They come in handy and all you need to do is input the exact figures.
Filing tax refund in Canada – how long will it take?
If the tax filing was don online, the CRA will normally mail your tax refund in two weeks. If you happen to file the conservative way, the waiting time is longer, which usually takes eight weeks. Returns can take as long as sixteen weeks if you are outside Canada. It can take longer if your tax return is marked for a more thorough examination. The CRA advises registering for direct deposit to expedite the processing of your return. A compounding 1% to 5% daily interest rate will be paid by CRA if it takes more than a month to process your return. The excess amount received and retained over the course of the year is not subject to interest.