BAF103 - INCOME TAX PLANNING ASSIGNMENT BEGINS:

Meet Jane and John Anderson

Jane and John Anderson come to you asking for basic tax advice to go along with their financial plan recommendations. Their specific information is found on the associated excel document.

Specifically, given the information on that excel document and using the forms provided on Blackboard, complete the tax forms for either John or Jane. Calculate and show their tax payable or refundable.

I do not expect the first assignment to be done perfectly; however, I do expect students to put in time and effort to make a reasonable attempt based on what we have studied in the first three weeks of the course. This will also help me assess your ability to read and follow the instructions on the tax returns provided and will inform how I teach the following weeks of the course.

I am under no illusion that students are highly motivated to collaborate with one another on this assignment. My recommendation though would be to work on this yourself individually because you need to practice for tests and examinations. Reliance on others might help to some extent but you need to learn this material yourself. You will not have access to others and/or support materials during tests and examinations and, more importantly, you will not have access to others when you are preparing tax returns for clients in the future should you decide to pursue a CFP designation.

This assignment prepares you for the first test so it is vital you learn how to complete the tax return on your own. Students who do not take the assignments seriously end up performing poorly on the tests and in the course overall.

Financial information for john and jane anderson
For tax year	2022
Married couple
Address		1355	Nowhere Street
PO Box		1355
RR		7
Town		Nowhere
Province		Ontario
Postal Code	K0K 9K0
Correspondence	English
Social insurance number
	john	455 555 555
	jane	655 555 556
John is employed, Jane is self employed

		John		Jane
Employment income	$ 105,000.00		$ 30,000.00
Business income			$ 70,000.00
Business expenses			$ 32,000.00
Interest income	$ 4,000.00		$ 4,200.00
RRSP contributions	$ 7,000.00		$ 6,000.00
TFSA contributions	$ 3,500.00		$ 5,000.00
CPP contributions	?		?
EI contributions	?		?
Tuition fees			$ 4,500.00
Interest paid on RRSP loan			$ 400.00
Professional dues, fees	$ 700.00		$ 500.00
Total taxes paid (instalments)	$ 28,350.00		$ 8,100.00
Hint for Jane: EI and CPP premiums - would only be paid on employment income PRETEND she does not pay on business income for now

BASED ON THE INFORMATION ABOVE, FILL OUT THE FORMS BELOW

Form ON428

Part A - Ontario tax on taxable income Enter your taxable income from line 26000 of your return. Use the amount from line 1 to complete the appropriate column belov See the privacy notice on your return. 5006-C E (21) Page 4 of 4 Part C - Ontario tax (continued) Protected B when completed Amount from line 61 of the previous page Ontario surtax: Amount from line 62 above Ontario tax on split income from line 52 Line 63 minus line 64 (if negative, enter "0") 62 63 64 65 Complete lines 66 to 68 if the amount on line 65 is more than $4,874. (Line65 $4,874)20% (if negative, enter "0") = Line 66 plus line 67 $6,237)36% (if negative, enter "0") = Line 62 plus line 68 Ontario dividend tax credit from line 57 Line 69 minus line 70 (if negative, enter "0") Ontario additional tax for minimum tax purposes: If you entered an amount on line 98 of Form T691, use Worksheet ON428 to calculate your additional tax for minimum tax purposes. Line 71 plus line 72 66 67 Ontario tax reduction Enter "0" on line 80 if any of the following applies to you: - You were not a resident of Canada at the beginning of the year - You were not a resident of Ontario on December 31, 2021 - There is an amount on line 72 - The amount on line 73 is " 0 " - Your return is filed for you by a trustee in bankruptcy - You are not claiming an Ontario tax reduction If none of the above applies to you, complete lines 74 to 80 to calculate your Ontario tax reduction. Part A - Ontario tax on taxable income Enter your taxable income from line 26000 of your return. Use the amount from line 1 to complete the appropriate column belov See the privacy notice on your return. 5006-C E (21) Page 4 of 4 Part C - Ontario tax (continued) Protected B when completed Amount from line 61 of the previous page Ontario surtax: Amount from line 62 above Ontario tax on split income from line 52 Line 63 minus line 64 (if negative, enter "0") 62 63 64 65 Complete lines 66 to 68 if the amount on line 65 is more than $4,874. (Line65 $4,874)20% (if negative, enter "0") = Line 66 plus line 67 $6,237)36% (if negative, enter "0") = Line 62 plus line 68 Ontario dividend tax credit from line 57 Line 69 minus line 70 (if negative, enter "0") Ontario additional tax for minimum tax purposes: If you entered an amount on line 98 of Form T691, use Worksheet ON428 to calculate your additional tax for minimum tax purposes. Line 71 plus line 72 66 67 Ontario tax reduction Enter "0" on line 80 if any of the following applies to you: - You were not a resident of Canada at the beginning of the year - You were not a resident of Ontario on December 31, 2021 - There is an amount on line 72 - The amount on line 73 is " 0 " - Your return is filed for you by a trustee in bankruptcy - You are not claiming an Ontario tax reduction If none of the above applies to you, complete lines 74 to 80 to calculate your Ontario tax reduction