LARRY AND LINDA SMITH ARE MARRIED AND LIVE WITH ALL OF THEIR CHILDREN. THEY HAVE ASKED YOU TO PREPARE THEIR INCOME TAX RETURNS 2022 ON
LARRY AND LINDA SMITH ARE MARRIED AND LIVE WITH ALL OF THEIR CHILDREN. THEY HAVE ASKED YOU TO PREPARE THEIR INCOME TAX RETURNS 2022 ON CANTAX (NOT THEIR CHILDREN'S)
LARRY: SIN # (ANY).; BIRTH: DECEMBER 15, 1970. (Insert your name) LINDA: SIN # (ANY): BIRTH: JANUARY 12, 1976. (Insert your name) NOTE: (USE ANY ADDRESS AND ANY OTHER PERSONAL INFORMATION REQUIRED!! THANKS)
CHILDREN:
MARY-BIRTH: MAY 11, 2019; NET INCOME: $0; DISABLED: HEARING LOSS;
MIKE -BIRTH: OCTOBER 12, 2002; NET INCOME/Taxable Income: $15,000; FULL-TIME (8 MONTHS) COLLEGE STUDENT: TUITION: $10,000 PAID BY PARENTS.
Larry worked 500 Hours this year as a Volunteer Fire Fighter. (Volunteer Fire Fighter Credit) The parents also paid $50,000 in Adoption Fees to officially adopt Mary, this year.
LARRY AND LINDA 'S INVESTMENT INCOME- (Line 12000 and 12100)
TD BANK INTEREST $1,000 (Larry) CANADA SAVING BONDS INTEREST $500 (Linda) SCOTIA BANK ELIGIBLE DIVIDEND RECEIVED IN CASH: $1,000 (Larry)
RENTAL INCOME: (LINDA) (Line 12600) (20% of Building is used for personal use) COMMERCIAL BUILDING CLASS 1, UCC (JAN 1, 2022): $200,000 (net of 20% personal use)
FURNITURE CLASS 8: UCC (JAN 1, 2022): $10,000; PURCHASE: COST $20,000; DISPOSAL: ORIGINAL COST: $5,000; PROCEEDS: $20,000. Hint: Capital Gain, L12700
GROSS RENT - $90,000 MAINTENANCE EXPENSE - $40,000 (non capital, and deductible) MORTGAGE INTEREST - $2,000 PROPERTY TAX - $3,000
STOCKS AND OTHER CAPITAL GAINS: (LARRY) (Line 12700)
SOLD HIS LPP-Painting FOR $8,000 WHICH COST HIM $200 TO PURCHASE SOLD XYZ SHARES - COST $30,000; PROCEEDS $50,000 PRIOR YEARS' UNUSED ALLOWABLE CAPITAL LOSSES $10,000 (2005) (Hint: use Line 25300) INVESTMENT INTEREST EXPENSE - $2,500; (Line 22100, Schedule 4)
PROFESSIONAL CONSULTING BUSINESS (LARRY) (Use Line 13700 Professional)
REVENUE $40,000; OFFICE SUPPLY EXPENSES $5,000; CPA PROFESSIONAL FEES- $500 Home Office Expenses: (100M2 of 1,000M2 of home; Utilities was $1,000; Insurance was $2,000; Property tax was $3,000)
AUTO: TOTAL KM DRIVEN IN 2022-20,000, BUSINESS-20% total expenses: gas($5,000); Insurance ($1,200);Maintenance($4,000) Auto cost (Ucc-$20,000, claim maximum)
PRIOR YEARS' UNUSED BUSINESS LOSSES $20,000 (2018) (Hint: Use Line 25200)
CANTAX T1- ASSIGNMENT #1, CONTINUED PAGE #2
EMPLOYMENT INCOME-LARRY (XYZ Co.)
SALARY-$90,000
Deductions: EI Maximum for this year. (Look up for 2022) CPP Maximum for this year. (Look up for 2022) INCOME TAX - $30,000 RPP - $3,000
LARRY CONTRIBUTED $5,000 TO HIS WIFE'S SPOUSAL RRSP (2022). LARRY'S Last Years EARNED INCOME = $20,000. NO PENSION ADJUSMENT.
EMPLOYMENT INCOME - LINDA (Indiana Corp)
GROSS-$40,000
Deductions: EI Please calculate (The rate was 1.58%) CPP Please calculate. (The rate was 5.7%) RPP-$1,000 INCOME TAX $12,000
LINDA CONTRIBUTED THE MAXIMUM ALLOWED TO HER OWN RRSP (2022). LINDA'S Last Years EARNED INCOME = $50,000; PENSION ADJJUSTMENT. (Last Year) =$2,000.
CONTRIBUTIONS :( LARRY AND LINDA)
Charities: UNITED WAY - $1,500; Hospital for Sick Kids - $7,000 QUALIFIED FEDERAL POLITICAL PARTY DONATION- $4,000
QUALIFIED MEDICAL EXPENSES - $10,000 (LINDA) CHILD CARE EXPENSE (2022) - $5,000 (NANNY) USE ANY NAME AND ADDRESS.
Please ensure that you are backing up your file on a USB Stick or in your Cloud Storage. (Hint: Prior to submitting, please re-do the Medical and Charity Credit)
REQUIRED:
Using Cantax T1-Current, Calculate the Couples MINIMUM INCOME TAX PAYABLE for Larry and Linda
Please submit in PDF (as reviewed in class) the following for submission:
COMBINED TAX SUMMMARY (LARRY AND LINDA-1pg) (This will be your cover page-full page!) BUSINESS INCOME AND EXPENSES (LARRY)-T2125, Pages 3 & 4 Only RENTAL INCOME AND EXPENSES (LINDA)-T776, Pages 2 & 3 Only CAPITAL GAINS (LARRY AND LINDA)-Sched 3 Pages 1 & 2 DETAILED TAX CALCULATION (T1-page 6-7) Schedule 1 Federal (LARRY AND LINDA)
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