Question 1

A T4 slip is a document provided to you by

Accepted Answer

A) your bank, showing how much interest you received. 
B) your government, showing how much employment benefits you received. 
C) your employer, showing your salary and all deductions associated with your employment. 
D) your education institution showing your eligible tax credits. 
A) your bank, showing how much interest you received. 
B) your government, showing how much employment benefits you received. 
C) your employer, showing your salary and all deductions associated with your employment. 
D) your education institution showing your eligible tax credits.

Question 2

Which of the following items is affected by the taxpayer's income level?

Accepted Answer

A) The amounts deducted for employment expenses 
B) The amounts that can be deducted for charitable contributions 
C) The amount of clawback on social assistance payments 
D) Basic personal exemptions 
A) The amounts deducted for employment expenses 
B) The amounts that can be deducted for charitable contributions 
C) The amount of clawback on social assistance payments 
D) Basic personal exemptions

Question 3

Which of the following can be used to reduce your federal income taxes?

Accepted Answer

A) Mortgage interest expense 
B) Real estate taxes 
C) Provincial income taxes 
D) Student loan interest 
A) Mortgage interest expense 
B) Real estate taxes 
C) Provincial income taxes 
D) Student loan interest

Question 4

The key tax planning decisions in building your financial plan are knowing what tax savings are currently available to you and how you can increase your tax savings in the future.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following are not legitimate deductions?

Accepted Answer

A) Mortgage interest expense 
B) Union dues 
C) RRSP contributions 
D) The cost of investment advice 
A) Mortgage interest expense 
B) Union dues 
C) RRSP contributions 
D) The cost of investment advice

Question 6

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

Accepted Answer

A) taxes are deducted from your income and withheld at the source. 
B) that Canada's tax system supports progressive social programs. 
C) the higher your income, the higher your tax rate. 
D) that marginal tax rates decrease at higher income levels. 
A) taxes are deducted from your income and withheld at the source. 
B) that Canada's tax system supports progressive social programs. 
C) the higher your income, the higher your tax rate. 
D) that marginal tax rates decrease at higher income levels.

Question 7

The basic personal amount is a non-refundable tax credit.

Accepted Answer

A) True 
 B)False

Question 8

Tax evasion is a good tax planning technique because it results in larger refunds.

Accepted Answer

A) True 
 B)False

Question 9

GST credit for low-income families and the Working Income Tax Benefit are examples of non-refundable tax credits.

Accepted Answer

A) True 
 B)False

Question 10

If your tax calculated is zero, refundable credits may be paid to you.

Accepted Answer

A) True 
 B)False

Question 11

Tax credits amount to the same savings as tax deductions.

Accepted Answer

A) True 
 B)False

Question 12

Which item below will not reduce taxes?

Accepted Answer

A) Medical expenses exceeding three percent of net income 
B) Charitable contributions 
C) Child support payments established in the past fifteen years 
D) Spousal support payments established in the past fifteen years 
A) Medical expenses exceeding three percent of net income 
B) Charitable contributions 
C) Child support payments established in the past fifteen years 
D) Spousal support payments established in the past fifteen years

Question 13

Non-refundable tax credit means that the portion of the credit that is not needed to reduce your tax liability will not be paid to you this year but will be paid to you next year.

Accepted Answer

A) True 
 B)False

Question 14

Purchasing which of the following items on credit will help reduce your tax bill?

Accepted Answer

A) Automobile 
B) Stocks 
C) Stereo 
D) Boat 
A) Automobile 
B) Stocks 
C) Stereo 
D) Boat

Question 15

The average tax rate is

Accepted Answer

A) the amount of tax paid as a percentage of total taxable income. 
B) the amount of tax paid on total income earned. 
C) a better indicator of tax-efficient planning than the marginal rate of tax. 
D) the amount of tax paid as a percentage of net income. 
A) the amount of tax paid as a percentage of total taxable income. 
B) the amount of tax paid on total income earned. 
C) a better indicator of tax-efficient planning than the marginal rate of tax. 
D) the amount of tax paid as a percentage of net income.

Question 16

All employees can deduct interest or carrying charges on all loans.

Accepted Answer

A) True 
 B)False

Question 17

Comment on your level of knowledge to prepare your taxes. Do you need to hire an accountant or can you prepare your taxes manually? Are you going to invest in any software that helps you prepare your tax return? Will you use NETFILE?

Accepted Answer

You have the basic knowledge to prepare

Question 18

Knowledge of individual income taxes is crucial to sound financial planning.

Accepted Answer

A) True 
 B)False

Question 19

Real is thinking about asking his employer to defer a $5000 bonus to next year's income because he will have to pay $2050 in tax if he receives it this year. What should he consider before asking his employer to do so?

Accepted Answer

A) His marginal tax rate now and next year and the opportunity cost of waiting. 
B) He should take the bonus now because deferring it would be tax evasion. 
C) If his marginable tax rate this year is 45 percent, he should defer it to next year. 
D) If his marginal tax rate next year will be 40 percent, he should defer it to next year. 
A) His marginal tax rate now and next year and the opportunity cost of waiting. 
B) He should take the bonus now because deferring it would be tax evasion. 
C) If his marginable tax rate this year is 45 percent, he should defer it to next year. 
D) If his marginal tax rate next year will be 40 percent, he should defer it to next year.

Question 20

Which of the following tax credits is eligible for carry forward for five years?

Accepted Answer

A) Medical expenses amount 
B) Education amount 
C) Charitable contribution amount 
D) Pension income amount 
A) Medical expenses amount 
B) Education amount 
C) Charitable contribution amount 
D) Pension income amount

A T4 slip is a document provided to you by

Which of the following items is affected by the taxpayer's income level?

Which of the following can be used to reduce your federal income taxes?

The key tax planning decisions in building your financial plan are knowing what tax savings are currently available to you and how you can increase your tax savings in the future.

Which of the following are not legitimate deductions?

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

The basic personal amount is a non-refundable tax credit.

Tax evasion is a good tax planning technique because it results in larger refunds.

GST credit for low-income families and the Working Income Tax Benefit are examples of non-refundable tax credits.

If your tax calculated is zero, refundable credits may be paid to you.

Tax credits amount to the same savings as tax deductions.

Which item below will not reduce taxes?

Non-refundable tax credit means that the portion of the credit that is not needed to reduce your tax liability will not be paid to you this year but will be paid to you next year.

Purchasing which of the following items on credit will help reduce your tax bill?

The average tax rate is

All employees can deduct interest or carrying charges on all loans.

Comment on your level of knowledge to prepare your taxes. Do you need to hire an accountant or can you prepare your taxes manually? Are you going to invest in any software that helps you prepare your tax return? Will you use NETFILE?

Knowledge of individual income taxes is crucial to sound financial planning.

Real is thinking about asking his employer to defer a $5000 bonus to next year's income because he will have to pay $2050 in tax if he receives it this year. What should he consider before asking his employer to do so?

Which of the following tax credits is eligible for carry forward for five years?

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

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

A T4 slip is a document provided to you by

Which of the following items is affected by the taxpayer's income level?

Which of the following can be used to reduce your federal income taxes?

The key tax planning decisions in building your financial plan are knowing what tax savings are currently available to you and how you can increase your tax savings in the future.

Which of the following are not legitimate deductions?

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

The basic personal amount is a non-refundable tax credit.

Tax evasion is a good tax planning technique because it results in larger refunds.

GST credit for low-income families and the Working Income Tax Benefit are examples of non-refundable tax credits.

If your tax calculated is zero, refundable credits may be paid to you.

Tax credits amount to the same savings as tax deductions.

Which item below will not reduce taxes?

Non-refundable tax credit means that the portion of the credit that is not needed to reduce your tax liability will not be paid to you this year but will be paid to you next year.

Purchasing which of the following items on credit will help reduce your tax bill?

The average tax rate is

All employees can deduct interest or carrying charges on all loans.

Comment on your level of knowledge to prepare your taxes. Do you need to hire an accountant or can you prepare your taxes manually? Are you going to invest in any software that helps you prepare your tax return? Will you use NETFILE?

Knowledge of individual income taxes is crucial to sound financial planning.

Real is thinking about asking his employer to defer a $5000 bonus to next year's income because he will have to pay $2050 in tax if he receives it this year. What should he consider before asking his employer to do so?

Which of the following tax credits is eligible for carry forward for five years?

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