Income Taxes Due

Question #$4-(5$ Points$)$

Here are some preliminary details and data about a single woman with no dependents.

She needs your help computing and filing her $2023$ income taxes $($due in mid$-2024).$ She

earns a salary of $$180,000$ and is a resident of Ontario. Below is a list of her financial

expenses$/$activities during the $2023$ tax year, which may $($or may not$)$ be relevant to

computing her taxes.

She made the maximum contribution to CPP and El for $2023($you can ignore CPP

enhancement for simplicity$)$

She made an $$6000$ donation to Sick Kids Toronto.

She contributed $$20,000$ to a TFSA, invested in a GIC earning $5\%$ in $2023.$

She contributed $$25,000$ to her RRSP and invested in a balanced international

equity mutual fund which earned only $5\%$ as capital gain by the end of $2023.$ She

believes that $5\%$ is too low. So$,$ she liquidated all her mutual fund units at the end

of $2023$ and invested all her RRSP money in the bond market.

She invested $$15,000$ into a taxable investment account and earned only $4\%$ as

capital gain by the end of $2023$ on S&P$500$ ETFs. Like her decision about her

RRSP$,$ she sold all her ETFs at the end of $2023$ and invested the money in the

bond market.

She has also a stock portfolio in her taxable account. The value of her portfolio

increased from $$38,000$ at the beginning of $2023$ to $$52,000$ at the end of $2023.$

The portfolio was kept intact without any trades during $2023$ but she received

$$1,000$ as dividend in $2023.$

She had medical expenses, for which she was $*$ not$*$ reimbursed by her employer's

insurance company totaling $$8,500.$

She paid a total of $$48,000$ in $($personal$)$ home mortgage payments, of which

$$28,000$ was interest.

She gave $$2,000$ as a gift to her younger brother who is $21$ years old.

You should look up the amounts and list of credits$/$deductions online from the relevant

websites.

Part A: What is her taxable income? Also, please compute the total amount due $($Federal

and Provincial$)$ in taxes for the $2023$ tax year $($due in mid$-2024).$ You must show your

work for all calculations.

Part B: What is her average tax rate? What is her marginal tax rate?