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

There is a clawback of social assistance payments on income above a certain level.

Fillipe is in the forty percent marginal tax bracket and has a variety of income sources.Which of the following will he owe the least tax for?

Canada's tax system is called "progressive," which means the higher someone's income,the higher the percentage of income paid in taxes.

Robert is 66 and so qualifies for the age amount.His taxable income for 2014 was $65 000.The threshold income for the age amount is $34 873 and the maximum age amount is $6915.What age amount will he qualify for?

The T4 slip provided by your employer shows all your earnings and deductions for the year.

A capital gain results from profit on the sale of capital assets.

Organizing your records to take advantage of tax credits and deductions and investing in tax sheltered accounts like RRSPs and TFSAs are the best ways to avoid taxes.

Tuition,pension,and age amount credits can be transferred to your spouse if you have no tax to pay.

Knowledge of individual income taxes is somewhat relevant to financial planning.

Your earnings for last year were $42 000.How much of an RRSP contribution can you make this year (if you have no other RRSP room)?

Income earned from the sale of an asset for more than you paid for it is classified as

Miranda is 35 and her tax planning creates opportunities to receive a $1800 tax refund each year.If she allocates this to her RRSP each year and earns a 7 percent annual return,how much extra retirement savings will she have at age 65? If she allocated this $1800 each year to a regular investment account which also earned a 7 percent annual return,how much money would she have there? Explain the tax implications and assumptions you need to make for this comparison.

When considering allocating funds to a TFSA account versus an RRSP account,which of the following is least critical?

Jerome is recently divorced and has two children that live with his ex-wife.What deductions should Jerome claim on his tax return?

You have a salary of $30 000,an RPP deduction of $2000,$1000 interest on your line of credit and paid union dues of $800.If the basic personal amount is $11 138 and the federal tax rate is 15 percent,what federal tax do you owe?

If George is 65 and in a combined marginal tax bracket of 42 percent,then

If you are working as a Certified Financial Planner and you pay $500 to the association every year for membership,you can deduct this amount on your personal tax return as

Various tax planning tools include RRSPs,TFSAs,RESPs and taking advantage of the opportunity to invest in capital assets.

Describe and compare tax planning and tax avoidance.Use the web to research and give an example of each.

Ralph has total income of $53 000.He has business expenses of $18 000,made a $5000 RRSP contribution and incurred $4000 in college expenses for his daughter,who did not work and is a freshman at a local community college.Personal basic exemptions of $11 138 and a marginal tax rate of 26 percent apply.Compute Ralph's taxable income for the current year.