To be completed in groups of 3. You can sign up on platform. If you do not have a group, I will assign one for you.
Required: Calculate the Total Federal Tax for Jaya. Your submission must be in the format provided on page 2.
Scenario:
Jaya has come to you for help in calculating her Total Federal Tax for 2021.
Jaya is a single mother to 17 year-old twins. Her ex-husband pays her $1,000 per month spousal support and $2,000 per month child support.
Jaya is an office administrator who earns $67,850 per year. She also has a side business making jewellery. Her net business income was $13,275 in 2021.
Jaya is quite interested in investing and had the following transactions in 2021:
- Received $1,700 in eligible dividends
- Sold shares in Company A for $8,400 (ACB is $2,389)
- Sold shares in XYZ Corporation for $2,350, which she purchased 3 years ago for $9,745
- Contributed $4,642 to her RRSP
She has learned a lot about investing over the last few years, after making a losing investment in a small business corporation. She invested in SBC shares costing $6,400, which she sold for $4,500 3 years ago.
The required CPP contributions were deducted by Jaya’s employer. Her employer also deducted EI contributions of $889.54
In addition, Jaya made $2,500 in charitable donations during 2021.
BONUS: What is Jaya’s average tax rate and marginal tax rate?
Submission Format (recommend using Excel)
| 3(a) | Employment Income |
| Business Income | |
| Property Income | |
| Other Income | |
| = Income from All Sources | |
| 3(b) | + Taxable Capital Gains |
| 3(c) | – Other Deductions |
| 3(d) | – Loss for Employ, Bus, Prop, ABIL |
| = Division B Net Income | |
| – Division C Deductions | |
| = Taxable Income | |
| Federal Tax on Taxable Income: (calculate here) | |
| – Federal Non-refundable Tax Credits | |
| – Federal Refundable Tax Credits | |
| = Total Federal Tax |
