Mini-Case B: (4.5 marks)

Ava has asked you to help prepare her 2021 personal income tax returns (combined Federal and Quebec). For 2021, she provided you with the following:

• T4 tax slip from Hydro-Qubec where she works as an engineer, reporting her 2021 gross annual salary of $105,000;

• T5 tax slip showing interest income received in 2021 of $1,500;

• On December 1, 2021, she sold 100 shares in Canadian Tire for $180/share (she had purchased 150 shares when they were at $110/share in 2019);

• Made a Tax-Free Savings Account (TFSA) contribution of $6,000 on January 1, 2021;

• Contributed the maximum to her Registered Retirement Savings Plan (RRSP) plan on May 15, 2021, when she received her company bonus (note that her 2020 earned income was $100,000; she maximizes her RRSP contribution each year and is not part of a company pension plan);

• Professional dues from the Order of Quebec Engineers that she can deduct in the amount of $945; and

• Has a capital loss of $600 from a previous year that she can deduct against her capital gain.

a) It is February 18, 2022, calculate Avas 2021 Taxable Income. (1.5 marks)

Calculate Avas 2021 Taxable Income (1.5 marks -.25 marks each)

b) Calculate Avas combined Federal and Quebec taxes payable. Use Table A, 2021 tax rates. Ignore non-refundable tax credits. (1.5 marks)

Calculate Avas combined Federal and Quebec 2021 taxes payable (1.5 marks)

c) Calculate Avas average tax rate. (.5 marks)

Calculate Avas 2021 average tax rate (.5 marks)

d) What is Avas marginal tax rate? (.5 marks)

Avas 2021 marginal tax rate (.5 marks)

e) On December 2021 Ava referred one of her friends to Hydro-Qubec as they were searching for a Junior Engineer to fill one of their open positions. Even though the referral was in 2021, Ava only received the $5,000 Referral Bonus in her first pay in 2022, which she must include in her 2022 personal income tax return. Assuming she had received the Referral Bonus in 2021, how much tax would she have had to pay on this bonus? (.5 marks)

Calculate Avas taxes payable on her bonus using her marginal tax rate (.5 marks)