With the arrival of the 2025 tax season, Income Tax residents of Ontario are preparing to file their 2024 tax returns with the Canada Revenue Agency (CRA).
The official start date of the tax season is February 24, 2025, when the online option becomes operational through NETFILE. The filing deadline for most Canadians is generally April 30, 2025.
Self-employed taxpayers have up to June 16, 2025, to file, but any taxes owed must be paid by April 30 to avoid penalties.
The Federal Tax Bracket for Income Tax over 2024 (Filing in 2025). The federal government composed the following bracket for income taxes over the tax year 2024:
| Taxable Income Range | Tax Rate |
|---|---|
| Up to $55,867 | 15% |
| $55,867.01 to $111,733 | 20.5% |
| $111,733.01 to $173,205 | 26% |
| $173,205.01 to $246,752 | 29% |
| Over $246,752 | 33% |
Conversely, the federal Basic Personal Amount (BPA) for 2024 is maintained at $15,705 for individuals whose net income is $173,205 or less, whereas for income brackets $173,205 to $246,752, the BPA gradually decreases to $14,156.
In general, if your income exceeds $246,752, your BPA is $14,156. Being a non-reimbursable credit, it makes a reduction in your federal tax liability. The BPA credit would, therefore, max out at $2,355.75 ($15,705 × 15%) at 15%.
Ontario Provincial Income Tax Brackets for 2024 (Filing in 2025)
Ontario’s provincial tax brackets for the 2024 tax year are as follows:
| Taxable Income Range | Tax Rate |
|---|---|
| Up to $51,446 | 5.05% |
| $51,446.01 to $102,894 | 9.15% |
| $102,894.01 to $150,000 | 11.16% |
| $150,000.01 to $220,000 | 12.16% |
| Over $220,000 | 13.16% |
The provincial Basic Personal Amount (BPA) is $12,399 for 2024. It translates into this being a tax credit worth $626.15 ($12,399 multiply by 5.05 percent) by the lowest tax rate of 5.05 percent.
How the Progressive Tax Bracket Works:
With a progressive tax system, income portions falling within each bracket are taxed at that given rate. For instance, with a total income of $60,000:
Federal taxes:
- First $55,867 taxed at 15%: $8,380.05
- Then, $4,133 taxed at 20.50% ($60,000 – $55,867): $847.77
- Total Federal Tax: $9,227.82
- Ontario provinces taxes:
- First $51,446 taxed at 5.05%: $2,598.37
- Then, $8,554 taxed at 9.15% ($60,000 – $51,446): $783.70
- Total Provincial Tax: $3,382.07
- Total Tax: $12,609.89
After applying both the federal BPA and the provincial BPA, your income gets reduced, thereby reducing your tax liability.
Important Dates for the 2025 Tax Season:
- February 24, 2025: The CRA opens tax filing for 2024 via NETFILE.
- April 30, 2025: The filing deadline for most Canadians, along with paying owed amounts by this date.
- June 16, 2025: Filing deadline extension for self-employed persons (taxes owed are due by April 30).
- E-filing makes it simple to file; hence, through e-filing, the refund reaches you sooner before the penalty arrives.
- Refunds are generated within a time period of 2-3 weeks by e-filers through CRA NETFILE. On the other hand, paper processing would take at least 8 weeks.
Ways to Save on Your Tax Bill
- Max out your RRSP contributions: The limit for RRSP contributions remains $31,560 for 2024 (or 18% of your earnings for 2023, whichever is less). These contributions reduce your taxable income.
- Use Every Tax Credit Available: Try out some available tax credits like the Medical Expense Tax Credit, the Canadian Child Benefit (CCB), and other disability tax credits.
- Choose Software: Use TurboTax or Wealthsimple to make calculations easier and pinpoint missing deductions.
- Get a Professional Tax Consultant: Helpful with complex cases like those involving self-employment or rental income.
- Understanding the tax brackets federal and Ontario-wide in a combined way for the year 2024 is essential for planning finances properly.
You should now calculate your own tax liability to allow a change in withholding, claiming all eligible deductions, and not suffering any nasty surprises later. So, if you are earning $30,000 or $500,000, knowing how much taxes apply to your income will help in guiding you to better financial decisions.
FAQS:
What are the tax brackets for an individual in Ontario?
Ontario has a progressive tax system whereby only part of the whole income that lies in brackets is taxed at that rate. Low income is taxed at low rates, high income is taxed at the higher rates.
When is the deadline to file 2024 taxes in Ontario?
The tax-filing season commences on February 24, 2025, and runs through April 30, 2025. This is the date that applies to most Canadians. A self-employed taxpayer is given until June 16, 2025, to file, although he must pay any taxes owed by April 30 to avoid penalties.