Exam 2: Procedures and Administration

For 2018, Mr. Mason Boardman has combined federal and provincial Tax Payable of $62,350. For this year, his employer withheld $61,600. For 2019, his combined federal and provincial Tax Payable is $29,760. For this year, his employer withheld $13,740. For 2020, he anticipates having combined federal and provincial Tax Payable of $52,370. He expects that his employer will withhold $47,390. In January, 2020, you are asked to provide tax advice to Mr. Boardman. He has asked you whether it will be necessary for him to pay instalments in 2020 and, if so, what the minimum amounts that should be paid are, along with the dates on which these amounts are due. Required: Provide the information requested by Mr. Boardman. Show all your calculations.

George Klause dies on March 1, 2021. All of his income during 2020 was earned through his unincorporated accounting practice. By what date must his representatives file his 2020 income tax return? Explain your answer.

Mr. Khan, a self-employed construction contractor, dies on April 1, 2020. What is the latest filing date for his final tax return?

Ms. Marston has net tax owing for 2018 of $4,500, net tax owing for 2019 of $8,000, and estimated net tax owing for 2020 of $7,500. If she wishes to pay the minimum total amount of instalments for the 2020 taxation year, her first payment on March 15 will be for what amount?

Which of the following scenarios will result in a penalty being charged by the CRA?

For the three years ending December 31, 2020, Galina Skurnick's combined federal and provincial taxes payable are as follows: Assume Ms. Skurnick's employer withholds combined federal and provincial taxes for each year as follows: Required: For each of the preceding independent Cases, calculate the minimum instalment payments that are required to be made towards the settlement of the taxes payable for the year ending December 31, 2020. Show all required calculations. If instalments must be paid, your answer should include the date that each instalment is due. Note that, in answering this question, you should state a conclusion on whether or not instalments are required, even if the amount of the instalments is nil.

Despite the fact that her net tax owing has been between $7,000 and $8,000 in the two previous years, and is expected to be a similar amount during 2020, Marsha Fields has made no instalment payments for 2020. While her normal filing date would be April 30, 2021, she does not file her 2020 return or pay the balance owing until August 24, 2021. Marsha has filed her return on time in all previous years. What penalties and interest will be assessed for the 2020 taxation year?

Which of the following is NOT one of the criteria for a CCPC to be considered a small CCPC eligible to pay instalments on a quarterly basis?

The taxation year end for Breyson Ltd. is June 30, 2020. It is a Canadian controlled private corporation that claims the small business deduction and had Taxable Income for the year ending June 30, 2019 of $132,000. Indicate the date on which the corporate tax return for the year ending June 30, 2020 must be filed, as well as the date on which any final payment of taxes is due.

The penalty for an individual making insufficient instalment payments is 5 percent of the total unpaid tax at the filing date, plus 1 percent per month.

The balance due date for a corporation is:

Larry Short has self-employment income of $62,000 in 2020. Prior to this year, he was employed full-time and his employer's withholdings more than covered his tax liability for the year. Larry estimates that, based on his self-employment income, his net tax owing for 2020 will be $8,000. Which of the following statements is true?

Tax avoidance involves deliberately ignoring a specific provision in the Income Tax Act.

All of the following people will have to pay tax by instalments this year, except:

Which of the following individuals did NOT have to pay instalments in 2020?

Minnie Belanger is retired. She filed her 2020 tax return on March 5, 2021. She received a portion of the tax refund claimed and an assessment notice, dated April 19, 2021, which set out the difference between the amount claimed and the amount of the refund. As Minnie disagrees with the notice of assessment, she wishes to file a notice of objection. What is the latest date she has to file a notice of objection?

For the three years ending December 31, 2020, Gloria Sloan had combined federal and provincial Tax Payable as follows: Using this information consider the following three independent cases. Required: A. For each of the three cases: • indicate whether instalments are required for the 2020 taxation year. Show all of the calculations required to make this decision; • in those cases where instalments are required, indicate the amount of the instalments that would be required under the approach used in the CRA's instalment reminder; and • in those cases where you have calculated the instalments required under the CRA's instalment reminder, indicate whether you believe there is a better approach and calculate the required instalments under that approach. B. For those Cases where instalments are required, indicate the dates on which the payments will be due.

Ms. Deveco's 2020 income tax return is due on April 30, 2021. While she is too busy to file her tax return on that date, she remits a cheque 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, 2021. At this time, the return shows that her actual net tax owing was $9,800. Assuming that the interest rate applicable to late payment of taxes is one-half percent per month without daily compounding, how much will she owe in penalties and interest on the late filing?

Lemar Ltd. has a December 31 year end. It is not a small CCPC. For 2018, its taxes payable were $71,500, while for 2019, the amount was $93,600. For 2020, its estimated taxes payable are $114,700. What would be the minimum instalment payments for the 2020 taxation year and when would they be due? How would your answer differ if Lemar Ltd. qualified as a small CCPC?

Bunly Im is a self-employed hairdresser. Which of the following dates are correct for the date by which his tax return for a year must be filed (1st item)and his payment due date (2nd item)?