HomeworkProblem 4-2,4-3, 4-4

HomeworkProblem 4-2,4-3, 4-4 - Solution to Problem 4-2...

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Solution to Problem 4-2 Calculate the Federal Taxes Payable by Mr. William Norris under the various scenarios provided for the taxpayer. Mr. Norris’s employment income is $51,000 this year and the employer has withheld CPP and EI. Case A : Mr. Norris is married to Susan, who earned $8,800 this year. Susan’s 73 year old mother lives with them. She has NIFTP of $16,000 for the year. Solution: Federal Tax: $6,146 + 22%($51,000-$40,970) $8,353 Tax Credits: Basic Personal Amount $10,382 Spousal ($10,382 – $8,800) 1,582 CPP 2,163 EI 747 Canada Employment 1,051 Caregiver: ($4,223 – [$16,000-$14,422]) 2,645 Total Credits $18,570 x 15% = ( 2,786 ) Federal Tax Payable $5,567 Mr. Norris would claim the caregiver tax credit for his mother-in- law since his wife would have no Tax Payable.
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Case B : Mr. Norris’s wife has employment income of $4,410 and his 10 year old daughter had no income. The family’s medical expenses follow: Mr. Norris $1,200 Mrs. Norris 1,600 Daughter 350 Total $3,150. Solution: Federal Tax: $6,146 + 22%($51,000-$40,970) $8,353 Tax Credits: Basic Personal Amount $10,382 Spousal: ($10,382– $4,410) 5,972 Child 5,972 CPP 2,163 EI 747 Canada Employment 1,051 Medical Expenses: ($3,150 – lesser of [3% X $51,000] or $2,024) 1,620 Total Credits $24,036 X 15% ( 3,605 ) Federal Tax Payable $4,748
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Case C : Mr. Norris’s wife has employment income of $4,500. The son attends university for 8 months. His tuition was $4,000, his books cost $900 and he will transfer unused credits to his father. The son earned income of $2,200 during the summer. Solution:
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HomeworkProblem 4-2,4-3, 4-4 - Solution to Problem 4-2...

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