wealth tax

Delean: Median income in Quebec for 2020 tax year was $38,809

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It can be a bit of a shock when you compare what you earned and what you took home.

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With Quebecers now receiving their T4 and other tax slips in advance of the filing deadline in April, they’re getting a clearer picture of how they fared in 2021.

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For many, it’s the one time of the year that they tabulate and assess the full cost of pension and health insurance plans, Quebec Pension Plan and employment insurance dues, and provincial and federal taxes deducted automatically from their cheques.

It can be a bit of a shock when you compare what you earned and what you took home.

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So where do you fit on the provincial income spectrum?

According to Revenue Quebec’s most recent statistics, median income — the dividing line for the 6.7 million individual tax returns filed for the 2020 tax year — was $38,809. Average income was higher at $51,802, reflecting the effect of higher earners.

In 2019, the last pre-pandemic year, more than 550,000 Quebecers declared incomes above $100,000. If you were in that group, count yourself among the top nine per cent of earners in the province. A total of 17,467 (0.26 per cent) topped $500,000.

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But the majority of Quebec tax filers — about 65 per cent — reported income below $50,000. Just over one-third declared less than $25,000, with seniors accounting for roughly one-third of that group.

Wealth is measured in many ways, not just income, but the numbers are still revealing. Quebec clearly has work to do to narrow the wealth gap with other populous provinces.

And now for this week’s reader questions.

Q: I have unused net capital losses from the tech bubble of $97,642. I’m now 76 and don’t foresee being able to use them all in my lifetime to offset capital gains. Is there any way they can benefit my spouse? We have joint accounts and do have some dividends, investment expenses and capital gains for 2021. Is it best that I declare them all to use up some of the losses? Is that allowed? She is in a low tax bracket.

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A: If the capital losses were reported and attributed to you, they can’t be transferred to her, said Jonathan Bicher, partner at accounting firm EY Private in Montreal. For tax purposes, the income in the joint account in 2021 needs to be allocated to each person in the same percentage as in past years. You can’t suddenly change the formula and assume her share of the gains. Bicher said an option available at this stage is that your wife sells her share of the investments, pays tax on the gains and loans you the proceeds, at the Canada Revenue Agency’s prescribed lending rate (currently one per cent), so that you invest the funds and possibly generate capital gains. But gains, as you learned the hard way, are not a given.

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Q: Does the purchase and installation of a stairlift qualify as a medical expense or for some other tax deduction?

A: If you’re 65 or older, or eligible for the disability tax credit at any time in the year, it could qualify as a home accessibility expense eligible for a federal tax credit, to a maximum of $10,000. Lifts or transportation equipment designed for people with disabilities also can be qualifying medical expenses if they’re prescribed by a medical practitioner.

The Montreal Gazette invites reader questions on tax, investment and personal-finance matters. If you have a query you’d like addressed, please send it by email to Paul Delean at gazpersonalfinance@hotmail.com.

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