Individual Net Income Taxable Income, and Tax Payable Mr. Daniel Tong is employed as a project manager for Portus Ltd., a Canadian public corporation. He is married to Melanic and has two children. Jennifer who is 20 and Jessica who is 15. Mrs. Tong's net income in 2021 was $1,981. Mr. Tong has requested that you assist him in the preparation of his 2021 income tax return. Relevant financial information for 2021 is provided as follows: 1. Mr. Tong received a gross salary of 582,000 for the year (before any benefits that may arise from other information given). From this amount, Portus Ltd. deducted income tax of S27,100, CPP contributions of $2,876 and El premiums of $890. As well, 5655 was deducted for charitable donations 2. In February, 2021, Portus Ltd. paid Mr. Tong a $6,000 bonus based on his 2020 work performance which was over and above his gross salary. A 2021 bonus of $9,500 was received on March 1, 2022. 3. Mr. Tong has the full use of a company automobile that Portus Ltd. leases for an annual payment of $5,200. Porus Lid, paid all of the $4,300 in operating costs. During the year, Mr. Tong drove the car 21.000 km's, of which 7,000 km's were for employment purposes. 4. Mr. Tong was injured while working on project A101 and received Workers' Compensation benefits of $7,000, 5. Because of his injury, Mr. Tong incurred significant medical expenses that were not covered by his health insurance plan or Workers' Compensation of $2.200. 6. Because of his expertise in project management, Mr. Tong also did some consulting through an unincorporated company he set up in 2015. During 2021, his revenue from consulting was $3,600 while he incurred S2,700 in expenses. Mr. Tong operates a small office out of his home. The office is 10' X 10' and the total square footage of the house is 3,000 square foot. Cost incurred were as follows: Utilities 2.100 Insurance 820 Property Tax 1.500 Mortgage Interest 7830 Maintenance 750 Equipment consisting of some small office furniture (class 8) with a 2020 ending UCC of $2,600. A new fax machine costing $800 was purchased in March. 7. On December 29 Mr. Tong contributed $8,000 to an RRSP. Mr. Tong's RRSP deduction limit for 2021 was $7.000. 8. Mr. Tong rented his basement apartment from February 1, 2021 to the end of the year for $600 per month. His rental expenses were $4,800. 9. During 2021, Mr. Tong received cash dividends of $2,000 from Compass Inc., a Canadian Controlled Private Corporation (non-eligible dividends). These 6,000 shares were acquired in 2011 at a cost of $4.000. In December 2021, 1,500 of these shares were sold for proceeds of $3,000. Mr Tong incurred selling fees of S200 on this sale. 10. Mr. Tong's oldest child, Jennifer, is 20 years of age. During the year, she attended university full time for eight months and had employment income of $4,200. She paid tuition fees of $3,150. Any unused credits are available to be transferred to her father. 11. Mr. Tong received a TS from NL Credit Union for $330 in interest earned on a GIC. 12. Mr. Tong purchased an antique clock in 2007 for $800. In 2021, he sold the clock for $1600 13. Mr Tong had other donations of $500 to his local church during the year and incurred other medical cost as follows: Mr Tong $1.200 Mrs Tong 100 Jennifer 300 Jessica 125 Required: a) Calculate Mr. Tong's Net Income for the year, summarizing the amounts to be included in each of the following categories of income: (Round amounts to the nearest dollar) Employment Income Property Income Taxable Capital Gains Business Income Other Income and Deductions b) Identify any amounts that will be deducted from Net income in order to calculate Taxable income. (Round amounts to the nearest dollar.) Calculate taxes payable and Identify which non refundable tax credits are available to Mr Tong for the year. (Show all workings). (Round amounts to the nearest dollar.) d) Calculate the balance owing/(refund) for Mr Tong for 2021. Individual Net Income Taxable Income, and Tax Payable Mr. Daniel Tong is employed as a project manager for Portus Ltd., a Canadian public corporation. He is married to Melanic and has two children. Jennifer who is 20 and Jessica who is 15. Mrs. Tong's net income in 2021 was $1,981. Mr. Tong has requested that you assist him in the preparation of his 2021 income tax return. Relevant financial information for 2021 is provided as follows: 1. Mr. Tong received a gross salary of 582,000 for the year (before any benefits that may arise from other information given). From this amount, Portus Ltd. deducted income tax of S27,100, CPP contributions of $2,876 and El premiums of $890. As well, 5655 was deducted for charitable donations 2. In February, 2021, Portus Ltd. paid Mr. Tong a $6,000 bonus based on his 2020 work performance which was over and above his gross salary. A 2021 bonus of $9,500 was received on March 1, 2022. 3. Mr. Tong has the full use of a company automobile that Portus Ltd. leases for an annual payment of $5,200. Porus Lid, paid all of the $4,300 in operating costs. During the year, Mr. Tong drove the car 21.000 km's, of which 7,000 km's were for employment purposes. 4. Mr. Tong was injured while working on project A101 and received Workers' Compensation benefits of $7,000, 5. Because of his injury, Mr. Tong incurred significant medical expenses that were not covered by his health insurance plan or Workers' Compensation of $2.200. 6. Because of his expertise in project management, Mr. Tong also did some consulting through an unincorporated company he set up in 2015. During 2021, his revenue from consulting was $3,600 while he incurred S2,700 in expenses. Mr. Tong operates a small office out of his home. The office is 10' X 10' and the total square footage of the house is 3,000 square foot. Cost incurred were as follows: Utilities 2.100 Insurance 820 Property Tax 1.500 Mortgage Interest 7830 Maintenance 750 Equipment consisting of some small office furniture (class 8) with a 2020 ending UCC of $2,600. A new fax machine costing $800 was purchased in March. 7. On December 29 Mr. Tong contributed $8,000 to an RRSP. Mr. Tong's RRSP deduction limit for 2021 was $7.000. 8. Mr. Tong rented his basement apartment from February 1, 2021 to the end of the year for $600 per month. His rental expenses were $4,800. 9. During 2021, Mr. Tong received cash dividends of $2,000 from Compass Inc., a Canadian Controlled Private Corporation (non-eligible dividends). These 6,000 shares were acquired in 2011 at a cost of $4.000. In December 2021, 1,500 of these shares were sold for proceeds of $3,000. Mr Tong incurred selling fees of S200 on this sale. 10. Mr. Tong's oldest child, Jennifer, is 20 years of age. During the year, she attended university full time for eight months and had employment income of $4,200. She paid tuition fees of $3,150. Any unused credits are available to be transferred to her father. 11. Mr. Tong received a TS from NL Credit Union for $330 in interest earned on a GIC. 12. Mr. Tong purchased an antique clock in 2007 for $800. In 2021, he sold the clock for $1600 13. Mr Tong had other donations of $500 to his local church during the year and incurred other medical cost as follows: Mr Tong $1.200 Mrs Tong 100 Jennifer 300 Jessica 125 Required: a) Calculate Mr. Tong's Net Income for the year, summarizing the amounts to be included in each of the following categories of income: (Round amounts to the nearest dollar) Employment Income Property Income Taxable Capital Gains Business Income Other Income and Deductions b) Identify any amounts that will be deducted from Net income in order to calculate Taxable income. (Round amounts to the nearest dollar.) Calculate taxes payable and Identify which non refundable tax credits are available to Mr Tong for the year. (Show all workings). (Round amounts to the nearest dollar.) d) Calculate the balance owing/(refund) for Mr Tong for 2021
