As the 2025 tax season approaches, Ontario residents are preparing to file their 2024 tax returns with the Canada Revenue Agency (CRA).
The tax season officially begins on February 24, 2025, with online filing available via NETFILE. The standard filing deadline for most Canadians is April 30, 2025.
Self-employed individuals have until June 16, 2025, to file, but any taxes owed are still due by April 30 to avoid penalties.
Federal Income Tax Brackets for 2024 (Filing in 2025)
The federal government has established the following tax brackets for the 2024 tax year:
| 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% |
Additionally, the federal Basic Personal Amount (BPA) for 2024 is $15,705 for individuals with a net income of $173,205 or less. For incomes between $173,205 and $246,752, the BPA gradually decreases to $14,156.
If your income exceeds $246,752, your BPA is $14,156. This non-refundable credit reduces your federal tax liability. For example, at a 15% tax rate, the maximum BPA credit is $2,355.75 ($15,705 × 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) for 2024 is $12,399. At the lowest tax rate of 5.05%, this provides a tax credit of $626.15 ($12,399 × 5.05%).
How Progressive Tax Brackets Work
In a progressive tax system, only the portion of your income that falls within each bracket is taxed at the corresponding rate. For instance, if you earn $60,000:
- Federal Tax Calculation:
- First $55,867 taxed at 15%: $8,380.05
- Remaining $4,133 ($60,000 – $55,867) taxed at 20.5%: $847.77
- Total Federal Tax: $9,227.82
- Ontario Provincial Tax Calculation:
- First $51,446 taxed at 5.05%: $2,598.37
- Remaining $8,554 ($60,000 – $51,446) taxed at 9.15%: $783.70
- Total Provincial Tax: $3,382.07
Combined Total Tax: $12,609.89
After applying the federal and provincial BPAs, your taxable income decreases, reducing your overall tax liability.
Key Dates for the 2025 Tax-Filing Season
- February 24, 2025: CRA opens tax filing for 2024 returns via NETFILE.
- April 30, 2025: Deadline for most Canadians to file taxes and pay any owed amounts.
- June 16, 2025: Extended deadline for self-employed individuals to file (taxes owed are still due by April 30).
Filing early can help you avoid penalties and ensure faster processing of refunds. Utilizing CRA’s NETFILE allows for quick submissions, with refunds typically issued within 2-3 weeks. Paper returns may take 8 weeks or more.
Tips to Reduce Your Tax Bill
- Maximize RRSP Contributions: For 2024, the RRSP limit is $31,560 (or 18% of your 2023 earned income, whichever is lower). Contributions reduce your taxable income.
- Claim Tax Credits: Explore credits like the Medical Expense Tax Credit, Canadian Child Benefit (CCB), and disability tax credits.
- Use Tax Software: Tools like TurboTax or Wealthsimple can simplify calculations and identify deductions.
- Consult a Tax Professional: For complex situations (e.g., self-employment or rental income), professional advice can be beneficial.
Understanding the combined federal and Ontario tax brackets for 2024 is crucial for effective financial planning.
By estimating your tax liability now, you can adjust withholdings, maximize deductions, and avoid surprises. Whether your income is $30,000 or $500,000, knowing how your earnings are taxed empowers you to make informed financial decisions.
FAQs
How do tax brackets work in Ontario?
Ontario follows a progressive tax system, meaning only the portion of your income that falls within each bracket is taxed at that specific rate. Lower-income portions are taxed at lower rates, while higher earnings are taxed at higher rates.
When is the deadline to file 2024 taxes in Ontario?
The tax-filing season officially begins on February 24, 2025. The deadline for most Canadians is April 30, 2025. Self-employed individuals have until June 16, 2025, to file, but any taxes owed must be paid by April 30 to avoid penalties.