Exam 1: Tools for Financial Planning - Using Tax Concepts for Planning

When taxable income on a progressive basis exceeds certain thresholds

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

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

Fred's income this past year included salary of $70 000,$3 000 in interest income,a $4 000 capital gain from selling some stock and a $5000 inheritance.For tax purposes,what is his total income this year?

If Helen earns $105 000 taxable income in 2017,how much federal income tax does she have to pay according to the brackets and rates in the textbook.What is Helen's average tax rate for federal tax? Show your calculations.What is Helen's average tax rate using the combined rates in the textbook for your province? Show your calculations.

Tax credits are used to reduce tax

Sally's total income is $38 000 and she divorced last year.She does not own a home,but has charitable contributions of $1500 and interest on her car of $2100.This year she also paid spousal support of $2000,child support of $5000,and tuition of $2600.Her basic personal amount is $11 138.What is Sally's taxable income?

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

Union dues and spousal support payments can be deducted in the calculation of taxable income.

Provincial governments collect property taxes.

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.

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

Income from outside of Canada is not subject to Canadian income tax.

Every individual that earns employment income is required to file a personal income tax return.

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 $11 635 is allowed.How much should Melanie deduct on her tax return?

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

Robert is 66 and so qualifies for the age amount.His taxable income for 2017 was $65000 .The threshold income for the age amount is $36 430 and the maximum age amount is $7225.What age amount will he qualify for?

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

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?

The Basic Personal Amount is a non-refundable tax credit that reduces ones taxes by $11 635 in 2017.