Total Tax Assumptions

The Federal and Provincial tax calculations in Snap are made using the assumption that the current Canadian tax system is not going to change drastically, which is the best assumption that we can make as of today. 

The Total Tax paid is displayed in a column under Income Tax on the Planning page.  More details are available when you click the blue icon under the title of the column.

If any foreign withholding tax is applicable, it is included in the federal tax amount. (The foreign withholding tax default is 15%).  You can update the Portfolio Settings to adjust the percentage of foreign dividends in the Equity asset class allocation.

The provincial and federal tax brackets and applicable tax credits and deductions are indexed to inflation.

You can also customize the plan for non-refundable tax credits, tax deductions and taxable benefits.  To open the Income Taxes page in your scenario for the client or spouse, click Scenario Setup -> Settings -> Income Taxes.

If a client's taxable income remains constant in the projections you will see a reduction in the Total Tax paid each year (and the Effective Tax Rate) as the tax credits increase with inflation while the taxable income remains constant.

For clients with Ontario as their province of residence, the Ontario Health Premium is automatically calculated and included in the Total Tax value.