Question 1

Students should not file income tax returns because they have to pay sales taxes such as the GST and PST.

Accepted Answer

A) True 
 B)False  False

Question 2

Canada Revenue Agency charges all Canadians the same tax rates but the provinces have different tax rates.

Accepted Answer

A) True 
 B)False  True

Question 3

The marginal tax rate tells us

Accepted Answer

A) the average tax we will pay. 
B) the tax to be paid on the next dollar earned. 
C) the total tax rate to be paid. 
D) the minimum tax paid on lower earnings. 
A) the average tax we will pay. 
B) the tax to be paid on the next dollar earned. 
C) the total tax rate to be paid. 
D) the minimum tax paid on lower earnings. B

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

If a stock was purchased in January 2004 for $1000 and sold in December 2005 for $3000, what is the taxable result?

Accepted Answer

A) Taxable capital gain of $2000 
B) Taxable capital gain of $1000 
C) Income of $2000 
D) Annual taxable gain of $500 
A) Taxable capital gain of $2000 
B) Taxable capital gain of $1000 
C) Income of $2000 
D) Annual taxable gain of $500

Question 6

You have to file a personal tax return for the following reasons except

Accepted Answer

A) you received Working Income Tax Benefit (WIT
B) . 
B) you have to repay some OAS or EI benefits. 
C) the CRA sent you a request to file a return. 
D) you are eligible for the GST/HST credit. 
A) you received Working Income Tax Benefit (WIT
B) . 
B) you have to repay some OAS or EI benefits. 
C) the CRA sent you a request to file a return. 
D) you are eligible for the GST/HST credit.

Question 7

Current year's capital loss can be applied only to offset future capital gains.

Accepted Answer

A) True 
 B)False

Question 8

Determining taxes requires you to address all of the following topics except

Accepted Answer

A) gross income. 
B) living expenses. 
C) deductions. 
D) tax credits, refundable or not. 
A) gross income. 
B) living expenses. 
C) deductions. 
D) tax credits, refundable or not.

Question 9

If you have a salary of $38 000, medical expenses of $1600, and an RRSP contribution of $4000 and the federal tax rate is 15 percent, what federal tax will you pay?

Accepted Answer

A) $3500 
B) $4860 
C) $5013 
D) $4929 
A) $3500 
B) $4860 
C) $5013 
D) $4929

Question 10

Which of the following is not a tax credit mentioned in the chapter?

Accepted Answer

A) Age amount 
B) Child care amount 
C) Education amount 
D) Basic personal amount 
A) Age amount 
B) Child care amount 
C) Education amount 
D) Basic personal amount

Question 11

Medical expense amount tax credit is meant to address total medical expenses that are greater than either 3 percent of your total income or $2024, whichever is less.

Accepted Answer

A) True 
 B)False

Question 12

A tax credit used to reduce taxes would be

Accepted Answer

A) life insurance premiums. 
B) the education amount. 
C) carrying charges. 
D) professional dues. 
A) life insurance premiums. 
B) the education amount. 
C) carrying charges. 
D) professional dues.

Question 13

Self-employed taxpayers must file a tax return by June 15 of each year.

Accepted Answer

A) True 
 B)False

Question 14

Interest paid on student loans can be used to reduce tax owing.

Accepted Answer

A) True 
 B)False

Question 15

Deductions represent an amount that can reduce total income to arrive at a taxable income.

Accepted Answer

A) True 
 B)False

Question 16

All of the following are types of taxable income except

Accepted Answer

A) government benefits. 
B) life insurance benefits. 
C) rental income. 
D) the use of a company car. 
A) government benefits. 
B) life insurance benefits. 
C) rental income. 
D) the use of a company car.

Question 17

Capital losses resulting from the sale of stock can be used

Accepted Answer

A) as a tax credit against dividend or capital gains income. 
B) as a carry forward and used to reduce capital gains in the future. 
C) as a direct deduction against tax owing. 
D) to reduce total income only in the year the loss is taken. 
A) as a tax credit against dividend or capital gains income. 
B) as a carry forward and used to reduce capital gains in the future. 
C) as a direct deduction against tax owing. 
D) to reduce total income only in the year the loss is taken.

Question 18

Robert is 66 and so qualifies for the age amount. His taxable income for 2010 was $65 000. The threshold income for the age amount is $32 506 and the maximum age amount is $6446. He loses fifteen percent of the age amount for every dollar income over the threshold. What age amount will he qualify for?

Accepted Answer

A) $2446 
B) $1572 
C) $3224 
D) zero 
A) $2446 
B) $1572 
C) $3224 
D) zero

Question 19

If Helen earns $105 000 taxable income in 2010, how much federal income tax does she have to pay according to the brackets and rates as: follows First $40 970 at 15 percent; Over $40 970 up to $81 941 at 22 percent; Over $81 941 up to $127 021 at 26 percent? What is Helen's average tax rate for federal tax?

Accepted Answer

= (40 970 × 15%)+ (81 941 - 40

Question 20

Interest income would come from earnings on

Accepted Answer

A) stocks. 
B) term deposits. 
C) RESPs. 
D) sale of mutual funds. 
A) stocks. 
B) term deposits. 
C) RESPs. 
D) sale of mutual funds.

Students should not file income tax returns because they have to pay sales taxes such as the GST and PST.

Canada Revenue Agency charges all Canadians the same tax rates but the provinces have different tax rates.

The marginal tax rate tells us

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

If a stock was purchased in January 2004 for $1000 and sold in December 2005 for $3000, what is the taxable result?

You have to file a personal tax return for the following reasons except

Current year's capital loss can be applied only to offset future capital gains.

Determining taxes requires you to address all of the following topics except

If you have a salary of $38 000, medical expenses of $1600, and an RRSP contribution of $4000 and the federal tax rate is 15 percent, what federal tax will you pay?

Which of the following is not a tax credit mentioned in the chapter?

Medical expense amount tax credit is meant to address total medical expenses that are greater than either 3 percent of your total income or $2024, whichever is less.

A tax credit used to reduce taxes would be

Self-employed taxpayers must file a tax return by June 15 of each year.

Interest paid on student loans can be used to reduce tax owing.

Deductions represent an amount that can reduce total income to arrive at a taxable income.

All of the following are types of taxable income except

Capital losses resulting from the sale of stock can be used

Interest income would come from earnings on

Overview of a Financial Plan

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning With Personal Financial Statements

Banking Services and Managing Your Money

Managing Your Liquidity - Assessing, Managing, and Securing Your Credit

Personal Financing - Personal Loans

Personal Financing - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowners Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

Filters

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

Students should not file income tax returns because they have to pay sales taxes such as the GST and PST.

Canada Revenue Agency charges all Canadians the same tax rates but the provinces have different tax rates.

The marginal tax rate tells us

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

If a stock was purchased in January 2004 for $1000 and sold in December 2005 for $3000, what is the taxable result?

You have to file a personal tax return for the following reasons except

Current year's capital loss can be applied only to offset future capital gains.

Determining taxes requires you to address all of the following topics except

If you have a salary of $38 000, medical expenses of $1600, and an RRSP contribution of $4000 and the federal tax rate is 15 percent, what federal tax will you pay?

Which of the following is not a tax credit mentioned in the chapter?

Medical expense amount tax credit is meant to address total medical expenses that are greater than either 3 percent of your total income or $2024, whichever is less.

A tax credit used to reduce taxes would be

Self-employed taxpayers must file a tax return by June 15 of each year.

Interest paid on student loans can be used to reduce tax owing.

Deductions represent an amount that can reduce total income to arrive at a taxable income.

All of the following are types of taxable income except

Capital losses resulting from the sale of stock can be used

Interest income would come from earnings on

Overview of a Financial Plan

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning With Personal Financial Statements

Banking Services and Managing Your Money

Managing Your Liquidity - Assessing, Managing, and Securing Your Credit

Personal Financing - Personal Loans

Personal Financing - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowners Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

Filters