Canadian Tax Enthusiast

03/17/2026

Everyone talks about the tax benefits of incorporating but most people can’t actually explain them.

In this video, I’m breaking down one of the advantages business owners have over employees, and why it could mean thousands more invested every single year.

03/10/2026

How much taxes do we pay on gas?

This is based on 27th Annual Gas Tax Honesty report by Canadian Taxpayers Federation (August 2025)

03/10/2026

Comment “T1 prep” to sign up for free T1 training. Or link in my bio.

02/25/2026

A subsection 45(2) election is a tax provision that allows a taxpayer to defer the recognition of a capital gain when they completely or partially convert their principal residence into an income-producing property, such as a rental. By filing this election, the taxpayer is deemed not to have made the change in use for tax purposes.
Key features of the subsection 45(2) election include:

- Continued Exemption: It allows the property to continue qualifying as the taxpayer’s principal residence for up to four tax years, even if the taxpayer or their family no longer ordinarily inhabit the home during those years. This four-year limit can be removed entirely if the taxpayer had to move because they or their spouse/common-law partner relocated for employment.

- No CCA Allowed: You must still report the net rental income earned from the property, but you cannot claim Capital Cost Allowance (CCA) (depreciation) on the property. If you claim CCA, the election is immediately rescinded on the first day of that year.

- Filing Requirement: The election is made by attaching a signed letter to your income tax return for the year in which the change in use occurred.

- Limitations: You must remain a resident (or deemed resident) of Canada during those years to get the full benefit of the exemption. Additionally, you cannot designate another property as your principal residence for the same years the election is in force.

#45(2)

10/30/2025

Comment “T2prep” if you are a bookkeeper or an accountant and you want to learn how to prepare corporate taxes for your clients

10/28/2025

Comment “T2prep” if you are a bookkeeper or an accountant and you want to finally learn how to prepare corporate taxes for your clients.

10/09/2025

⬇️ Progressive Tax System Explained⬇️

Follow if you want to learn how to prepare corporate tax returns

Canada’s progressive tax system means that as your income increases, the rate of tax you pay on each additional dollar also increases. Instead of paying one flat rate on all your income, your income is divided into segments called “tax brackets,” and each segment is taxed at a different rate. Here’s how it works:

1) Tax Brackets: Your income is split into portions, and each portion falls into a specific tax bracket with its own tax rate. The more you earn, the higher the bracket your next dollar of income will fall into.

2) Marginal Tax Rate: The tax rate that applies to your last dollar of income is called your marginal tax rate. This is important because only the income within each bracket is taxed at that bracket’s rate, not your entire income.

3) Federal and Provincial Taxes: Canada has both federal and provincial/territorial tax brackets. You pay both, and each has its own set of brackets and rates. Your total tax is the sum of both.

Example (2025 Federal Rates):

The first $57,375 of your taxable income is taxed at 15%.
The next portion, from $57,375 to $114,750, is taxed at 20.5%.
The next portion, from $114,750 to $177,882, is taxed at 26%.
The next portion, from $177,882 to $253,414, is taxed at 29%.
Any income over $253,414 is taxed at 33%

10/09/2025