Tax Freedom Day

If you work, I’m sure that you work hard for you money so it’s only right that you keep the majority of it. As Canadian workers, we have to share part of our pay cheque with the government but there comes a day when you stop working for the government and start working for yourself. That’s what Tax Freedom Day is all about.

I think that we pay enough taxes as it is. Taxes are taken from us when we get our pay cheques and the amount that is taken off is way too much. And when we buy anything, we have to pay even more taxes. So it’s like, I pay 31.15% on my pay cheque and then an addition 13% on purchases. That’s almost 40% of my money going to the government.
According to the online tool from the Fraser Institute my Tax Freedom Day was on June 11. Throughout the year, I would have spent 161 days working for the government and 204 days working for myself. I work Monday to Friday so that’s not exactly 161 days. If you take away the weekends, I’ve only working about 120 days so that confuses me a little bit more. I’m assuming, if I read the charts correctly, everything that I’ll be paying to the government after June 11 will result in a tax refund.

I used a Personal Tax Calculator at Ernst & Young to calculate how much taxes I’ll be paying this year. I’m in the 31.15% tax bracket so I’ll be paying about $9,218 in tax. I’m planning on putting away my maximum for my RRSP so it’ll generate a savings of $2,617. I don’t’ know the exact calculations but that $2,617 should be my tax refund and if I’m getting a refund for that amount, I should probably think about getting an RRSP loan for that amount but then again, I would be going over my contribution limit for the year. I could max out my RRSP contribution and then donate the remainder to charity and get a tax credit and then get more back during tax season.

I’m not sure exactly how the Tax Freedom Day is calculated and it seems like it’s generating that date based on the average family whereas I’m entering the numbers as one income. It’s saying that I should be paying $9,218 in taxes but so far I’ve only paid $5,955.46 since the beginning of the year. Also, I’ve played around with my age and for it appears that as I get older, I get a $10 credit for something. That’s kind of cool. So if the dates are correct, I’m looking forward to working for my money.

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