Exam 4: Tools for Financial Planning - Using Tax Concepts for Planning

For people in the highest marginal tax bracket,which would save them the largest financial benefit?

Melanie,a homeowner,has mortgage interest of $3000,RRSP contributions of $1500,and charitable contributions of $500.According to her filing status,a basic personal amount of $11 138 is allowed.How much should Melanie deduct on her tax return?

Tax evasion occurs when taxpayers attempt to deceive Canada Revenue Agency by knowingly reporting less tax payable than what the law requires them to pay.

Canadians can deduct interest payments they made on loans they took to make RRSP contributions.

Which of the following is not an acceptable method of reducing your tax bill?

Self-employed taxpayers must have paid all taxes owing by April 30th of each year.

John has been told that he should not take any overtime because it will push him into the next tax bracket.Which of the following is True?

Deductions and tax credits both benefit high-income individuals more than moderate earners.

Which of the following is True for postsecondary students?

Which of the following would produce the largest financial benefit to a tax payer who earns $96000 and is in the forty percent marginal tax bracket and the twenty five percent average tax bracket? Assume that all items are options of equal importance.

Canada's taxation rules are called "progressive." This means

You have to file a personal tax return by April 30 each year only if Canada Revenue Agency sent you a request to file.

The basic personal amount is a non-refundable tax credit that can reduce tax payable to zero for people with income under $10 000.

Your earnings last year were $120 000,which is the 40 percent marginal tax bracket and 30 percent average tax bracket,in your province.How much would your taxes be reduced if you made the full RRSP contribution for this year (and had no additional RRSP room)?

The Federal Government's use of net income versus taxable income ensures

Fred's income this past year included salary of $70 000,$3000 investment income,a $4000 capital gain from selling some stock and a $5000 inheritance.For tax purposes,what is his total income this year?

If a stock was purchased for $3000 in January 2003 and is sold in June 2003 for $4000,what is the taxable result?

An investor who receives $10 000 interest will pay higher taxes than one who receives ?$10 000 from eligible dividends.

Tuition,education expenses,and charitable donations can be carried forward to reduce taxes in future years.

Roan is a student in Ontario who travelled to BC for his summer job.When in BC he worked in mining camps and his residence was over 40 km from his actual place of employment.He spent $2000 moving to BC and back to Ontario and earned $22 000.During the remaining eight months he went to school full time.Which of the following describes his tax situation best?