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
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
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.
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