Tax 1 Test 1X Feb09

Tax 1 Test 1X Feb09 - 1. (7 marks) Answer the following...

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1. (7 marks) Answer the following multiple choice questions: a)All of the following people will have to pay tax by instalments this year, except: A. Jane White, who received a one-time bonus of $60,000 last year and, because her employer had not deducted enough tax, found herself with net tax owing of $8,200. B. Karen Phillips, who has started to earn investment income, which resulted in net tax owing of $3,000 last year. Her investment income is expected to be even greater this year. C. Blake Fortin, who established a sole proprietorship two years ago. Blake had a very successful first year and, as result, he had net tax owing that year of $85,000. Business dropped in his second year, resulting in net tax owing of only $1,500. This year, business has picked up again and he expects to have net tax owing of $53,000. D. Terri Jones who has had taxable capital gains on real estate in excess of $20,000 in each of the last two years, and who expects to have similar gains this year. Terri has a marginal tax rate of 50 percent. Choose one letter and indicate why they do not have to pay installments. b) John Barron is self-employed and plans to file his 2005 tax return on June 15, 2006. He has to pay his taxes by this date: A. April 30, 2005. B. April 30, 2006. C. June 15, 2006. D. June 15, 2005. c) Ms. Marston has net tax owing for 2003 of $4,500, net tax owing for 2004 of $8,000, and net tax owing for 2005 of $9,500. If she wishes to pay the minimum total amount of instalments for the 2005 taxation year, her first payment on March 15 will be for what amount? A. Nil. B. $1,125. C. $2,375. D. $2,000.
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Ms. Deveco’s 2005 income tax return is due on April 30, 2006. While she is too busy to file her tax return on that date, she remits a check to the government for $10,000, her estimated amount of net tax owing on that date. She has never filed a late return before. She prepares and files her tax return on May 31, 2006. At this time, the return shows that her actual net tax owing was $9,800. Assuming that the interest rate for late payment of taxes is one-half percent per month, how much will she owe in penalties and interest? A. $ 49.
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This note was uploaded on 12/31/2011 for the course ACCT 461 taught by Professor Patel during the Spring '09 term at Humber.

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Tax 1 Test 1X Feb09 - 1. (7 marks) Answer the following...

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