Anthony was supposed to graduate from Concordia in April 2020 but realized he was missing a course to graduate. He took FINA 200 in the summer and started a full-time job on September 1, 2020, at Microsoft. His gross annual salary as a Software Engineer is $75,000. He never filed a tax return and only recently filed his 2020 personal income tax returns oncehe realized the importance in filing and how easy it was. He is now looking to prepare a tax estimate for his 2021 personal income tax returns to avoid surprises when filing his actual 2021 tax returns in April 2022.

a)

Given the information below, calculate Anthonys combined Federal and Quebec taxes payable. See Table A, use 2021 tax rates. Ignore Non-Refundable Tax Credits. (2.5 marks)

Anthony estimates the following for 2021:

Expects to receive a T4 tax slip from Microsoft reporting his 2021 gross annual salary of $77,250 (received a 3% on January 1, 2021, on his gross annual salary from 2020);

Expects to receive a T5 tax slip with interest received in 2021 of $1,500;

Sold 50 Microsoft shares on September 1, 2021 that he received a year ago as a signing bonus when he startedworking. He received the shares when they were valued at $300/share and recently sold them when they hit$380/share (he received a taxable benefit of $15,000 in 2020, which is the cost base of the shares when he started). All amounts are in Canadian dollars;

Will be making a Tax-Free Savings Account (TFSA) contribution of $12,000 before the end of the year using some of the proceeds from the sale of his Microsoft shares; and

Expects to make the maximum Registered Retirement Savings Plan (RRSP) contribution (calculate the maximum amount he can contribute knowing that his gross salary from September 1, 2020, to December 31, 2020 was $25,000). Microsoft does not have a pension plan

Calculate Anthonys's taxes payable?

b) What is Anthonys Marginal Tax Rate and Average Tax Rate?

c) Anthonys best friend (and neighbour), Sam lived on the same floor in an apartment on Guy Street, two doors down from each other. Sam graduated from Concordia in August 2021 and on September 1, 2021, he moved to Toronto where he landed his first full-time job with Amazon earning a salary of $75,000. He rented a small U-Haul van to take his furniture and personal possessions with him. As he drove on his own, he stopped to rest overnight in a hotel in Kingston. Sam kept all his receipts and supporting documents as he prefers to claim the detailed method versus the simplified method for his moving expenses. From the list below, what can Sam deduct for eligible moving expenses on his 2021 Federal personal income tax return?

U-Haul rental: $475

Gas: $160 for 597 kilometres

Going away party: $175 for beer and snacks

Boxes and packaging materials: $45

Utility disconnection charge in Montreal: $50

Utility reconnection charge in Toronto: $60

Meals during the move (breakfast: $10, lunch $20, dinner $35)

Cost to replace his Quebec drivers license for an Ontariodrivers license: $40

Cost of cancelling his Montreal lease: $250

Flowers that he sent to his girlfriend in Montreal before leaving: $50

Calculate eligible moving expenses.

d) Highlight and underline your response. On Federal personal income tax return, moving expenses are:

Decuction or Non Refundable Tax

Credit

e) Anthonys younger brother Matt just turned 18. He is not interested in filing a personal tax return and is too busy playing video games as he wants to be a pro gamer. He has been working since he was 16 years old testing video games for a gaming company. He is not interested in going to school as he is making pretty good money. Give Matt two(2) reasons for filing a tax return; use facts from the case.

TABLE A Combined Federal & Quebec Tax Brackets and Tax Rates 2011 Mars Rais 2000 Marina Tax Rate Canadian Dividende Canadian Do One Capta OC Non Na ht 2020 Test new 21370 45 44.545 27.536 13TON 45 17.500 www46.105.000 2.10.2011 445455465 2016 20. 22 40.000 up to 100.00 37.12 18.50 17.77% 20.407 over 3.535 up to $20,000 37.25 10.5 12.774 2005 10.200.00 41.20.50 20.20% Over 50.00 Bor.000 300 to $100.55 45.715 22 200 up to 1000 46.22.206 30415 1007 27332 04 41.30 Stots 3150473 T31201 40.42 over 51517 21051 00225.1235. 40% over $150 AF3 up to 5214.000 50:1525.07 35.75% 10.5 5331205540.0 10.02 2010 G 14 TABLE B Quebec Basic Personal Amount 2021 P A 221 Tax Rate 2020 Personal amount 3000 Tax Rate 5155 Federal Basic Personal Amount 2 for Art 2000 Pro Amund 2000 Tax R $13,000 10N 513,220 15% (11 See the federal tax rates for information on the federal personal amount increase. Source: TaxTips Copyright 2002-2021 Boat Harbour Investments Ltd TABLE C Tax-Free Savings Account (TFSA): Annual Limits Years Annual Limit Years Annual Limit Year started 2009 - 2012 $5,000/year 2016 - 2018 $5,500/year 2013-2014 $5,500/year 2019-2020 $6,000/year 2015 $10,000/year 2021 $6,000/year TABLED Registered Retirement Savings Plan (RRSP): Annual Limits Formula for RRSP contribution limit: 18% of your previous year's earned Income less your previous year's pension adjustment to an annual maximum. Year Annual maximum contribution limit 2019 $26,500 2020 $27,230 2021 $27,830 Page 12 of 13 TABLE A Combined Federal & Quebec Tax Brackets and Tax Rates 2011 Mars Rais 2000 Marina Tax Rate Canadian Dividende Canadian Do One Capta OC Non Na ht 2020 Test new 21370 45 44.545 27.536 13TON 45 17.500 www46.105.000 2.10.2011 445455465 2016 20. 22 40.000 up to 100.00 37.12 18.50 17.77% 20.407 over 3.535 up to $20,000 37.25 10.5 12.774 2005 10.200.00 41.20.50 20.20% Over 50.00 Bor.000 300 to $100.55 45.715 22 200 up to 1000 46.22.206 30415 1007 27332 04 41.30 Stots 3150473 T31201 40.42 over 51517 21051 00225.1235. 40% over $150 AF3 up to 5214.000 50:1525.07 35.75% 10.5 5331205540.0 10.02 2010 G 14 TABLE B Quebec Basic Personal Amount 2021 P A 221 Tax Rate 2020 Personal amount 3000 Tax Rate 5155 Federal Basic Personal Amount 2 for Art 2000 Pro Amund 2000 Tax R $13,000 10N 513,220 15% (11 See the federal tax rates for information on the federal personal amount increase. Source: TaxTips Copyright 2002-2021 Boat Harbour Investments Ltd TABLE C Tax-Free Savings Account (TFSA): Annual Limits Years Annual Limit Years Annual Limit Year started 2009 - 2012 $5,000/year 2016 - 2018 $5,500/year 2013-2014 $5,500/year 2019-2020 $6,000/year 2015 $10,000/year 2021 $6,000/year TABLED Registered Retirement Savings Plan (RRSP): Annual Limits Formula for RRSP contribution limit: 18% of your previous year's earned Income less your previous year's pension adjustment to an annual maximum. Year Annual maximum contribution limit 2019 $26,500 2020 $27,230 2021 $27,830 Page 12 of 13 expenses. From the list below, what can Sam deduct for eligible moving expenses on his 2021 Federal personal income tax return? (.75 marks) U-Haul rental: $475 Gas: $160 for 597 kilometres Going away party: $175 for beer and snacks Boxes and packaging materials: $45 Utility disconnection charge in Montreal: $50 Utility reconnection charge in Toronto: $60 Meals during the move (breakfast: $10, lunch $20, dinner $35) Cost to replace his Quebec driver's license for an Ontario driver's license: $40 Cost of cancelling his Montreal lease: $250 Flowers that he sent to his girlfriend in Montreal before leaving $50 Calculate eligible moving expenses: (.75 marks) d) chile and underline your response. (.25 marks) On the Federal personal income tax return, moving expenses are: Deduction Or Non-Refundable Tax Credit e) Anthony's younger brother Matt just turned 18. He is not interested in filing a personal tax return and is too busy playing video games as he wants to be a pro gamer. He has been working since he was 16 years old testing video games for a gaming company. He is not interested in going to school as he is making pretty good money. Give Matt two (2) reasons for filing a tax return; use facts from the case. (.5 marks-.25 marks each) 1) Response: 2) Response: Mini-Case C: (2 marks-1 each) a) Sarah went to the bank to enquire on a car loan in the amount of $25,000. CIBC has proposed a loan with the principal and interest due as a lump sum in 5 years. The interest rate on the loan from CIBC would be 7% compounded monthly. Sarah decided to go to her parents and ask for a simple interest loan for the same amount (.e. $25,000 due in a lump sum in 5 years but with simple interest of 7%). Her parents of course refused as they would be losing out on interest. What is the difference in compounding interest over simple interest? (1 mark) Calculation for Sarah: (1 mark) Page 8 of 13