Finance- Tax Exam

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Net Employment Income

Net Employment Income AP 3-12
Gross salary 82500
Add Taxable Benefits:
Bonus 20000
Auto Benefit 7460
Stock Option Benefit 3000
imputted Interest Benefit 375
Councelling fees 1500
114835
Deductions from Employment Income:
Professional Dues -3200
Professional Dues -1800
Net Employment Income 109835
NON-Income items:
Income tax 16000
CPP & EI 3452
Donations 2000

Auto benefit

AP 3-10
CALCULATION OF STANDBY CHARGE
- FOR PURCHASED AND LEASED VEHICLES
PURCHASED LEASED (expect a combination)
Personal Km driven 6000
Total kilometres driven 10000 - 0
Business portion as a % 0.4
ER pays 100% of operating costs 1
Capital Cost of vehicle including GST/HST 47500 - 0
Monthly Lease payment including GST/HST
EE paid ER 0
EE had the vehicle for 365 days (convert to months) 10
STANDBY CHARGE CALCULATION 6(1)(e)
Lesser of:
1) 2% X cost of vehicle X months vehicle available 9500 - 0
or 2/3 X monthly lease cost X months vehicle available 0 - 0
2) Standby Charge Reduction (A/B)
A=Personal KM divided by B=(1,667km X months vehicle available) 6000/(1667*10)
Standby Charge Reduction Amount (calculation in 1 x % in 2) 0 - 0
Total standby charge (lesser of 1 & 2) A 9500 - 0
OPERATING BENEFIT 6(1)(k)
Lesser of:
1) 1/2 of standby charge if applicable 0 - 0
2) $.26 x personal KM driven 1560 - 0
Operating Benefit - elected (lesser of 1 & 2) 1560 - 0
Less EE payments to ER 3600 - 0
Total Operating Benefit B 5160 - 0
Taxable benefit-automobile A + B 7460 - 0

Stock options

STOCK OPTIONS AP 3-10
PUBLIC PRIVATE
CORPORATION CORPORATION
1) Issuance Date -1,000 shares NO TAX EFFECT NO TAX EFFECT
FMV @ issuance @
OPTION PRICE @
2) Exercise Date NO TAX EFFECT
FMV @ exercise 18
OPTION PRICE or ACB 15
3 add to net employment income
50% Deduction permitted deducted between NITP & TI
Net inclusion to taxable income 3000
3) Disposal Date
POD 20000
Adjusted Cost 18000
Capital Gain (Loss) 2000 0 add to net employment income
50% Rate 0.5 0.5 deducted between NIFTP & TI
Taxable Capital Gain/(Loss) 1000 0

Sch 1 (2018) Template

Step 1 - Federal non-refundable tax credits Schedule 1
Tax Software problem - AP 4-1
Basic personal amount Claim $11,809 300 11,809
Age amount (if you were born in 1950 or earlier) (use federal worksheet) (maximum $7,333) 301 7,333
Spouse or common-law partner amount (if negative, enter "0")
$11,809 minus (3,200_ his or her net income from page 1 of your return) 303 8,609
Amount for an eligible dependant (attach Schedule 5) (if negative, enter "0")
$11,809 minus (__________ his or her net income) 305
Family caregiver amount for children born under 18 years of age 352 _____ x $2,182 367 6,986
Amount for infirm dependants age 18 or older (use federal worksheet and attach Schedule 5) 306
CPP or QPP contributions:
through employment from box 16 and box 17 on all T4 slips (maximum $2,594) 308
on self-employment and other earnings (attach Schedule 8) 310
Employment Insurance permiums from box 18 and box 55 on all T4 slips (maximum $858) 312 273
on self-employment and other eligible earnings (attach schedule 13) 317
Volunteer firefighters' amount 362
Search and rescue volunteers' amount 395
Canada employment amount
(if you reported employment income on line 101 or line 104, see line 363 in guide) (maximum $1,195) 363 1,195
Public transit amount 364
Children's arts amount 370
Home Buyers' Amount 369
Home Accessibility (maximum $10,000) 398 5,800
Adoption expenses 313
Pension income amount (use federal worksheet) (maximum $2,000) 314
Caregiver amount (use federal worksheet and attach Schedule 5) (maximum $6,986) 315
Disability amount (for self) (claim $8,235 or, if you were under age 18, use federal worksheet) 316
Disablility amount transferred from a dependant (use federal worksheet) 318 8,235
Interest paid on your student loans 319
Your Tuition, education, and textbook amounts (attach Schedule 11) 323
Tuition, education, and textbook amounts transferred from a child 324
Amounts transferred from your spouse or common-law partner (attach Schedule 2) 326
Medical expenses for self, spouse or common-law partner, and your
dependent children born in 1999 or later 330 2,800 26
Minus: $2,302 or 3% of line 236, whichever is less 495 27
Subtotal (if negative, enter "0") 2,305 28
Allowable amount of medical expenses for other dependants
(do the calculation at line 331 in the guide and attach Schedule 5) 331 1,125 29
Add lines 28 and 29 3,430 332 3,430
Add lines 1 to 30 335 53,943.00
Federal non-refundable tax credit rate 15%
Multiply line 31 by line 32 338 8,091
Donations and gifts (15% on first $200 and 29% thereafter)or (15% on first $200 and 33% thereafter) 349
(Enter amount on line 47 on next page) Total federal non-refundable tax credits: add lines 33 and 34. 350
Step 2 - Federal Tax on Taxable Income Schedule 1
Enter your taxable income from line 260 of your return - 0 36
If line 37 is > If line 37 is > If line 37 is >
Use the amount on line 39 to determine which If line 37 is $46,605 but < $93208 but < $144,489 but < If line 37 is >
one of the following columns you have to complete $46,605 or less $93,208 $144,489 $205,842 $205,842
Enter the amount from line 36 16,500 - 0 - 0 37
Base amount - 0 46,605 93,208 144,489 205,842 38
Line 37 minus line 38 (cannot be negative) - 0 - 0 39
Rate X 15% 20.5% 26% 29% 33% 40
Multiply line 39 by line 40 - 0 - 0 41
Tax on base amount NIL 6,991 16,544 29,877 47,670 42
Add lines 41 and 42 2,475 - 0 - 0 43
Go to Step 3 Go to Step 3 Go to Step 3 Go to Step 3 Go to Step 3
Step 3 - Net Federal Tax
Enter the amount from line 43 above 2,475 44
Federal tax on split income (from line 5 of Form T1206) 424 45
Add lines 44 and 45 404 2,475 2,475 46
Enter the amount from line 35 from prior page (Non-refundable Tax Credit) 350 8,091 47
423 48
Federal dividend tax credit (see line 425 in the guide) 425 49
Overseas employment tax credit (attach Form T626) 426 50
Minimum tax carryover (attach Form T691) 427 51
Add lines 47 to 51 8,091 52
Basic federal tax: Line 46 minus line 51 (if negative, enter "0") 429 53
Federal foreign tax credit (attach FormT2209) 405 54
Federal logging tax credit
Federal tax: Line 53 minus line 54 (if negative, enter"0") 406 55
Total federal political contributions (attach receipts) 409 56
Federal political contribution tax credit (use federal worksheet) (max $650) 410 57
Investment tax credit (attach Form T2038(IND)) 412 58
Labour sponsored funds tax credit
413 Net cost Allowable credit 414 59
Add lines 57, 58 and 59 416 60
Line 55 minus line 60 (if negative, enter "0") 417 61
(if you have an amount on line 45 above, see Form T1206)
Working income tax benefit (WITB) advance payments received (box 10 on the RC210 slip) 415 62
Additional tax on RESP accumulated income payments (attach Form T1172) 418 63
Net Federal Tax: add line 61, 62 and 63 420 64
Enter this amount on line 420 of your return
EI Payable 20
Refundable tax benefits medical Exp supplement 857
Federal Tax Withheld 500
Refundable tax benefits Working income tax benefit 1,624
Installments 4,000
Provincial Credits 116
Payable (Refund) 7,117

Sch 1 (2018) Template2

Tax Software problem - AP 4-3
Step 1 - Federal non-refundable tax credits Schedule 1
Basic personal amount Claim $11,809 300 11,809
Age amount (if you were born in 1950 or earlier) (use federal worksheet) (maximum $7,333) 301 11,809
Spouse or common-law partner amount (if negative, enter "0")
$11,809 minus (_______ his or her net income from page 1 of your return) 303
Amount for an eligible dependant (attach Schedule 5) (if negative, enter "0")
$11,809 minus (__________ his or her net income) 305
Family caregiver amount for children born under 18 years of age 352 _____ x $2,182 367
Amount for infirm dependants age 18 or older (use federal worksheet and attach Schedule 5) 306
CPP or QPP contributions:
through employment from box 16 and box 17 on all T4 slips (maximum $2,594) 308 2,594
on self-employment and other earnings (attach Schedule 8) 310
Employment Insurance permiums from box 18 and box 55 on all T4 slips (maximum $858) 312 858
on self-employment and other eligible earnings (attach schedule 13) 317
Volunteer firefighters' amount 362
Search and rescue volunteers' amount 395
Canada employment amount
(if you reported employment income on line 101 or line 104, see line 363 in guide) (maximum $1,195) 363 1,195
Public transit amount 364
Children's arts amount 370
Home Buyers' Amount 369
Home Accessibility (maximum $10,000)
Adoption expenses 313
Pension income amount (use federal worksheet) (maximum $2,000) 314
Caregiver amount (use federal worksheet and attach Schedule 5) (maximum $6,986) 315
Disability amount (for self) (claim $8,235 or, if you were under age 18, use federal worksheet) 316
Disablility amount transferred from a dependant (use federal worksheet) 318
Interest paid on your student loans 319
Your Tuition, education, and textbook amounts (attach Schedule 11) 323
Tuition, education, and textbook amounts transferred from a child 324
Amounts transferred from your spouse or common-law partner (attach Schedule 2) 326
Medical expenses for self, spouse or common-law partner, and your
dependent children born in 1999 or later 330 26
Minus: $2,302 or 3% of line 236, whichever is less 27
Subtotal (if negative, enter "0") 28
Allowable amount of medical expenses for other dependants
(do the calculation at line 331 in the guide and attach Schedule 5) 331 29
Add lines 28 and 29 332 28,265
Add lines 1 to 30 335
Federal non-refundable tax credit rate 15%
Multiply line 31 by line 32 338 4,240
Donations and gifts (15% on first $200 and 29% thereafter)or (15% on first $200 and 33% thereafter) 349 479
(Enter amount on line 47 on next page) Total federal non-refundable tax credits: add lines 33 and 34. 350 4,719
Step 2 - Federal Tax on Taxable Income Schedule 1
Enter your taxable income from line 260 of your return - 0 36
If line 37 is > If line 37 is > If line 37 is >
Use the amount on line 39 to determine which If line 37 is $46,605 but < $93208 but < $144,489 but < If line 37 is >
one of the following columns you have to complete $46,605 or less $93,208 $144,489 $205,842 $205,842
Enter the amount from line 36 152,866 - 0 37
Base amount - 0 46,605 93,208 144,489 205,842 38
Line 37 minus line 38 (cannot be negative) 8,377 - 0 39
Rate X 15% 20.5% 26% 29% 33% 40
Multiply line 39 by line 40 - 0 - 0 2,429 - 0 41
Tax on base amount NIL 6,991 16,544 29,877 47,670 42
Add lines 41 and 42 2,429 - 0 43
Go to Step 3 Go to Step 3 Go to Step 3 Go to Step 3 Go to Step 3
Step 3 - Net Federal Tax
Enter the amount from line 43 above 32,306 44
Federal tax on split income (from line 5 of Form T1206) 424 45
Add lines 44 and 45 404 32,306 32,306 46
Enter the amount from line 350 from prior page (Non-refundable Tax Credit) 350 4,719 47
423 48
Federal dividend tax credit (see line 425 in the guide) 425 49
Overseas employment tax credit (attach Form T626) 426 50
Minimum tax carryover (attach Form T691) 427 51
Add lines 47 to 51 4,719 52
Basic federal tax: Line 46 minus line 51 (if negative, enter "0") 429 53
Federal foreign tax credit (attach FormT2209) 405 54
Federal logging tax credit
Federal tax: Line 53 minus line 54 (if negative, enter"0") 406 27,587 55
Total federal political contributions (attach receipts) 409 56
Federal political contribution tax credit (use federal worksheet) (max $650) 410 57
Investment tax credit (attach Form T2038(IND)) 412 58
Labour sponsored funds tax credit
413 Net cost Allowable credit 414 59
Add lines 57, 58 and 59 416 60
Line 55 minus line 60 (if negative, enter "0") 417 61
(if you have an amount on line 45 above, see Form T1206)
Working income tax benefit (WITB) advance payments received (box 10 on the RC210 slip) 415 62
Additional tax on RESP accumulated income payments (attach Form T1172) 418 63
Net Federal Tax: add line 61, 62 and 63 420 64
Enter this amount on line 420 of your return
Provincial tax 19,494
Federal Tax Withheld 48,665
Climate Action Incentive 224
Payable (Refund) (1,808)