It is March 15, 2022. Michaels income from employment for the 2021 taxation year is $100,000. he does not earn commission income, and has no other sources of income. he operates out of his home office, where he principally conducts her employment duties. This office represents 10% of the floor space in Michaels home. Michael has told you that he spends about 60% of his time working from home and the other 40% of the time travelling.

Michael paid the following amounts related to the 2021 taxation year:

Utilities for house 1,500

Minor repairs for house 1,200

Property taxes for house 4,000

House insurance 800

Mortgage interest 8,000

Michaels employer lent him $50,000 on January 1, 2021, to be used to acquire a home in Calgary, AB. The loan is interest free and no principal payments were required until the end of the loan period. The loan was fully repaid on March 1, 2022. Assume that the CRA-prescribed rates for employee loans were as follows for the current year: January 1 to September 30 1% October 1 to December 31 2% Michael also received a Notice of Assessment for her 2020 tax return dated June 12, 2021. The CRA has disallowed many expenses from 2020. Michael disagrees with the assessment and wants to know what the next step is.

Required: a) Determine Michaels net income for tax purposes for 2021. Show all your calculations.

b) Outline the next steps Michael needs to take if she disagrees with the 2020 assessment. What is the deadline for completing this step.?