For this example, ignore any credits or other deductions not included in on the work sheet. This is a simplified example for illustrative purposes

In 2018, your client:

- earned $86,000 in salary

- earned $2,000 in interest

- earned $10,000 in capital gains

- earned $2,000 in Canadian eligible dividends

- made a $5,000 RRSP contribution

- made a $2,000 RESP contribution

- Your client did not prepay any taxes

1.

Calculate total taxable income

What was your client's total in come for 2018?

2.

Subtract deductions

What were your client's total deductions for 2018?

3.

Calculate net taxable income

- total taxable income minus deductions

What was your client's taxable income for 2018?

4.

Calculate Net Federal Taxes Payable

- don't forget to deduct the dividend tax credit

2018 Taxable Income Tax Rate

First $46,605 15.00%

Over $46,605 up to $93,208 20.50%

Over $93,208 up to $144,189 26.00%

Over $144, 189 up to $205,842 29.00%

Over $205,842 33.00%

What was your client's Net Federal Taxes Payable?

5.

Calculate Net Provincial Taxes Payable (ignore any provincial credits, including prov. Div. tax credit)

- apply your taxable income found in step 3 to the table below

2018 Taxable Income 2018 Tax Rates

first $42,960 5.05%

over $42,960 up to $85,923 9.15%

over $85,923 up to $150,000 11.16%

over $150,000 up to $220,000 12.16%

over $220,000 13.16%

6.

Calculate taxes payable

What was your clients total Federal and Provincial Taxes payable in 2018?

7.

Determine taxes already paid

8.

Determine if your client has a balance owing or a refund

How much does your client owe in 2018/ how much refund will they receive?

Answer:

Owing:$22,268.55

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I tried to solve this problem and I am not sure why the answer is $22,268.55