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It is April 2 0 2 4 and Kevin Dean has asked you to help him with his 2 0 2 3 taxes. During your
It is April and Kevin Dean has asked you to help him with his taxes. During your meeting with Kevin you learn the following: Kevin is thirty years old, divorced, and has an eightyearold son from his former marriage. He pays $ a month in child support. Kevin lives in City A where he is a salesman for a large manufacturing plant. He receives a base salary of $ per month plus a commission of on the sales he makes in the month. His sales were $ every month in Kevin moved to City A from City B on December st of when he was promoted and transferred with his company to the office in City A Kevins tax deductible moving expenses totaled $ He did not receive a reimbursement from his employer. He was able to claim $ of this expense on his tax return. Kevin took out a $ mortgage to purchase his new home. His interest payments were $ in In order to perform his work duties, Kevin is required to drive his own vehicle and pay for his expenses, for which he is not reimbursed. However, he does receive an allowance of $ each month which is treated as unreasonable for tax purposes. Kevin has a car which he uses seventyfive percent of the time for business purposes. The undepreciated capital cost of the vehicle at the beginning of was $ Total costs to operate the vehicle are $ per month. Interest expense on his car loan is $ per month. Kevin spends $ per month on suits for work. He also updates his cell phone regularly and typically spends $ per year on a new phone. Kevins cell phone bill is $ per month, of which twentyfive percent is for personal use. Kevin takes his files home with him at the end of the day and reviews his sales calls in his home office. He then returns the files to his office at his place of employment in the morning prior to leaving for the day to make sales calls. Kevins monthly total expense for his home insurance, property taxes, maintenance, and utilities is $ His home office occupies ten percent of the square footage in his home. Kevin maximizes his RRSP contribution each year. His earned income in was $ which consisted of $ in commissions. Required: a Calculate Kevins minimum net income for tax purposes for Use the aggregating formula from Section of the Income Tax Act to show your answer. b Indicate why any items have been omitted from your calculations.
It is April and Kevin Dean has asked you to help him with his taxes. During your meeting with Kevin you learn the following:
Kevin is thirty years old, divorced, and has an eightyearold son from his former marriage. He pays $ a month in child support.
Kevin lives in City A where he is a salesman for a large manufacturing plant. He receives a base salary of $ per month plus a commission of on the sales he makes in the month. His sales were $ every month in
Kevin moved to City A from City B on December st of when he was promoted and transferred with his company to the office in City A Kevins tax deductible moving expenses totaled $ He did not receive a reimbursement from his employer. He was able to claim $ of this expense on his tax return. Kevin took out a $ mortgage to purchase his new home. His interest payments were $ in
In order to perform his work duties, Kevin is required to drive his own vehicle and pay for his expenses, for which he is not reimbursed. However, he does receive an allowance of $ each month which is treated as unreasonable for tax purposes. Kevin has a car which he uses seventyfive percent of the time for business purposes. The undepreciated capital cost of the vehicle at the beginning of was $ Total costs to operate the vehicle are $ per month. Interest expense on his car loan is $ per month.
Kevin spends $ per month on suits for work. He also updates his cell phone regularly and typically spends $ per year on a new phone. Kevins cell phone bill is $ per month, of which twentyfive percent is for personal use.
Kevin takes his files home with him at the end of the day and reviews his sales calls in his home office. He then returns the files to his office at his place of employment in the morning prior to leaving for the day to make sales calls. Kevins monthly total expense for his home insurance, property taxes, maintenance, and utilities is $ His home office occupies ten percent of the square footage in his home.
Kevin maximizes his RRSP contribution each year. His earned income in was $ which consisted of $ in commissions.
Required:
a Calculate Kevins minimum net income for tax purposes for Use the aggregating formula from Section of the Income Tax Act to show your answer.
b Indicate why any items have been omitted from your calculations.
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