Mr. Donald lives in Burlington, Ontario. He is 38 years old. His spouse Melanie is 32 years old and has 2021 net income of $8,500. They have two children both of whom are in perfect health. Their daughter Ivey is 12 and has net income from part time jobs of $300. Their son Hugh is 10 and has no income of his own.

Mr. Donald works for a large public company and, in 2021, his basic salary is $103,000 and he earns commission income of $26,140. In 2021, his employer makes the following payroll withholdings:

Premiums to Company's Disability Insurance Plan -> $1,200

Payment for Personal Use of Company Car -> $600

Union Dues -> $260

Donations to Registered Charities -> $1,200

EI Premiums $890

CPP Contributions $3,166

RPP Contributions $4,200

OTHER INFORMATION:

• Mr. Donald's employer provides him with an automobile that was purchased in 2018 for $38,000. His employer pays all of the operating expenses which, in 2021 totalled $9,800. During the year, Mr. Donald drove the car a total of 48,000 kilometers, 42,000 of which were for employment use with 6,000 for personal use. he automobile was only available to Mr. Donald's for 10 months of the year
• Medical Expenses for the family were
  • Donald - > $3,650
  • Melanie -> $2,600
  • Ivey -> $1,300
  • Hugh -> $6,200
• Mr. Donald's employer makes a matching $4,200 contribution to the company's RPP on behalf of Mr. Donald.

• Mr. Donald's employer makes a matching $1,200 contribution to the company's disability insurance plan on behalf of Mr. Donald. The comprehensive disability insurance plan provides periodic benefits during any period of disability to compensate for lost employment income. Due to a two month sick leave, Mr. Donald receives disability insurance benefits of $10,950. Mr. Donald has been making a $1,200 contribution each year since 2018. He has had no disability insurance claims in any of the years 2018 to 2020.

• Mr. Donald is required to maintain an office in his home without reimbursement from his employer. His employer provides the required T2200 form. He uses 20% of the home's usable floor space for his office. The home office expenses are:

  Utilities and Maintenance $ 5,000

  Insurance $ 4,500

  Property Taxes $7,600

  Mortgage Interest $ 9,600

• Mr. Donald receives an annual travel allowance of $4,800 to cover hotel costs while travelling for employment purposes. His actual hotel costs for 2021 were $5,100. In addition, he spent $6,300 on client meals and entertainment. His employer does not reimburse any of these expenses.

• As with all of the other employees, Mr. Donald received a $750 gift certificate for use at a local department store. He also received a $300 cash reward for sales performance in 2021.

• In addition to his employment income, Mr. Donald has taxable capital gains from stock market trading of $4,500, a rental loss of $6,000 from a residential rental property, and $8,600 of profits from a business he carries on as a sole proprietor.

• Mr. Donald supports the church that he attends with monthly donations of $200 throughout 2021.

• Mr. Donald's 2020 net income was $98,000. This was composed of employment income of $93,000 (after the deduction of $4,000 for RPP contributions), interest income of $3,000, a rental loss of $7,000, and business income of $9,000.

• At the end of 2020, Mr. Donald's unused RRSP deduction room was $6,200 and he had no undeducted contributions. His employer reported a 2020 PA of $8,000.

REQUIRED: Ignore GST/HST & PST considerations.

A. CALCUATE MR. DONALD'S MAXIMUM DEDUCTIBLE RRSP CONTRIBUTION FOR 2021.

B.

Assume that Mr. Donald contributes the amount calculated in Part A to his RRSP. Calculate Mr. Donald's minimum 2021:

Net Income,

Taxable Income, and

Federal Income Tax Payable ignoring any income tax that may have been withheld by the employer or paid by instalments.