Question 4: Income Tax (25 marks)
Boris, age 36, works as a sales representative for a pharmaceutical company. He is single and has no dependents. He has provided you with the following information and asked you to help him complete his 2016 tax return.
Pay Stub:
| EARNINGS
YTD Earnings 93,000.00 |
GOVERNMENT
YTD Income Tax 23,555.95 CPP 2,564.10 EI 955.04 |
|
| BEFORE TAX DEDUCTIONS
YTD Group RRSP 4,650.00
|
AFTER TAX DEDUCTIONS
YTD Long term disability 1,104.42 |
EMPLOYER PAID BENEFITS
YTD Dental 3,009.45 EHC 5,198.66 Life (2X) 478.00 Employer RRSP 2,325.00 Workers Compensation 302.76
|
Additional info:
He withdrew $7,950 from his personal RRSP (separate from the Group RRSP with his employer) four years ago as part of the homebuyer’s plan. He has repaid the minimum of $530 each year and plans to do the same this year. The balance outstanding based on his 2015 Notice of Assessment is $6,890. He does not have any unused contributions from previous years. According to his most recent NOA his deduction limit is $23,900. He has also made a contribution of $6,200 to his personal RRSP account this taxation year.
He has the following investments:
High interest savings bank account that earned $89.25 in interest.
TFSA Account with a balance of $14,300. He has contributed $750 in 2016. He earned foreign dividends of $100 and interest of $72 in the TFSA account.
Non-registered investment account – he sold publicly traded shares at a loss of $385. He earned eligible dividends of $950. He was not provided with an information slip (refer here for instructions: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns409-485/425-eng.html). He also incurred carrying charges of $25 on the non-registered account.
He paid $1,500 for professional membership fees. His employer reimbursed him for this.
He does not qualify for the Canada Employment Amount.
Complete a 2016 tax return for Boris using the below forms.
Links to relevant forms:
T1 General: http://www.cra-arc.gc.ca/E/pbg/tf/5006-r/5006-r-16e.pdf
Schedule 1 Federal Tax: http://www.cra-arc.gc.ca/E/pbg/tf/5000-s1/5000-s1-16e.pdf
Schedule 3 Capital Gains or Losses: http://www.cra-arc.gc.ca/E/pbg/tf/5000-s3/5000-s3-16e.pdf
Schedule 4 Statement of Investment Income: http://www.cra-arc.gc.ca/E/pbg/tf/5000-s4/5000-s4-16e.pdf
Schedule 7: RRSP and PRPP: http://www.cra-arc.gc.ca/E/pbg/tf/5000-s7/5000-s7-16e.pdf
Canada Pension Plan Contributions and Overpayment: http://www.cra-arc.gc.ca/E/pbg/tf/5000-s8/5000-s8-16e.pdf
Ontario Tax: http://www.cra-arc.gc.ca/E/pbg/tf/5006-c/5006-c-16e.pdf
Ontario dividend tax credit: http://www.cra-arc.gc.ca/E/pbg/tf/5006-d/5006-d-16e.pdf
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Question 4: Income Tax (25 marks)
Boris, age 36, works as a sales representative for a pharmaceutical company. He is single and has no dependents. He has provided you with the following information and asked you to help him complete his 2016 tax return.
Pay Stub:
| EARNINGS
YTD Earnings 93,000.00 |
GOVERNMENT
YTD Income Tax 23,555.95 CPP 2,564.10 EI 955.04 |
|
| BEFORE TAX DEDUCTIONS
YTD Group RRSP 4,650.00
|
AFTER TAX DEDUCTIONS
YTD Long term disability 1,104.42 |
EMPLOYER PAID BENEFITS
YTD Dental 3,009.45 EHC 5,198.66 Life (2X) 478.00 Employer RRSP 2,325.00 Workers Compensation 302.76
|
Additional info:
He withdrew $7,950 from his personal RRSP (separate from the Group RRSP with his employer) four years ago as part of the homebuyer’s plan. He has repaid the minimum of $530 each year and plans to do the same this year. The balance outstanding based on his 2015 Notice of Assessment is $6,890. He does not have any unused contributions from previous years. According to his most recent NOA his deduction limit is $23,900. He has also made a contribution of $6,200 to his personal RRSP account this taxation year.
He has the following investments:
High interest savings bank account that earned $89.25 in interest.
TFSA Account with a balance of $14,300. He has contributed $750 in 2016. He earned foreign dividends of $100 and interest of $72 in the TFSA account.
Non-registered investment account – he sold publicly traded shares at a loss of $385. He earned eligible dividends of $950. He was not provided with an information slip (refer here for instructions: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns409-485/425-eng.html). He also incurred carrying charges of $25 on the non-registered account.
He paid $1,500 for professional membership fees. His employer reimbursed him for this.
He does not qualify for the Canada Employment Amount.
Complete a 2016 tax return for Boris using the below forms.
Links to relevant forms:
T1 General: http://www.cra-arc.gc.ca/E/pbg/tf/5006-r/5006-r-16e.pdf
Schedule 1 Federal Tax: http://www.cra-arc.gc.ca/E/pbg/tf/5000-s1/5000-s1-16e.pdf
Schedule 3 Capital Gains or Losses: http://www.cra-arc.gc.ca/E/pbg/tf/5000-s3/5000-s3-16e.pdf
Schedule 4 Statement of Investment Income: http://www.cra-arc.gc.ca/E/pbg/tf/5000-s4/5000-s4-16e.pdf
Schedule 7: RRSP and PRPP: http://www.cra-arc.gc.ca/E/pbg/tf/5000-s7/5000-s7-16e.pdf
Canada Pension Plan Contributions and Overpayment: http://www.cra-arc.gc.ca/E/pbg/tf/5000-s8/5000-s8-16e.pdf
Ontario Tax: http://www.cra-arc.gc.ca/E/pbg/tf/5006-c/5006-c-16e.pdf
Ontario dividend tax credit: http://www.cra-arc.gc.ca/E/pbg/tf/5006-d/5006-d-16e.pdf
Previous answers to this question
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