Part A - Calculating Taxable Income, Income Tax Payable and Effective Tax Rate (15 Marks)

(The following information is for solving Questions 1 to 13 below)

Tax Brackets for Salary and Interest Income

Dividend Tax Treatment

0 to $15,000

$15,001 to $30,000

$30,001 to $70,000

$70,001 to $110,000

$110,001 to 200,000

$200,000 plus

0%

20%

30%

35%

40%

55%

Dividend Gross Up Rate

Federal Dividend Tax Credit

Provincial Dividend Tax Credit

20%

14%

8%

Charity Tax Credit

Capital Gains Exclusion Rate

50%

First $200 donation

Above $200 donation

12%

20%

It is the month of February, and Taylor is working on their income taxes. Taylor recorded the following information from the past year.

• Salary Income $112,000
• Interest Income from Bond Mutual Fund $2,000
• Capital Gains $3,000
• Dividend Income $1,200
• RRSP Contribution $4,000
• Charity Contributions to Algonquin College Alumni Fund $500