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% 15% 25% 30% 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 $120,000
• Interest Income from Bond Mutual Fund $2,000
• Capital Gains $4,400
• Dividend Income $1,450
• RRSP Contribution $4,000
• Charity Contributions to Algonquin College Alumni Fund $500

Question 9 (1 point)

What would be the provincial dividend tax credit amount?

Question 9 options:

	$145.20
	$150.00
	$139.20
	$138.75
	$125.80

Question 10 (1 point)

What would the amount of net taxes they would pay on their dividend income?

Question 10 options:

	$322.30
	$359.20
	$313.20
	$213.20
	$330.00

Question 11 (1 point)

Since Taylor made a RRSP contribution of $4,000, how much in income taxes would they be saving based on this RRSP contribution?

Question 11 options:

	$1,400.00
	$1,238.50
	$1,291.04
	$1,500.00
	$1,390.50

Question 12 (1 point)

Since Taylor had made $800 in charity contributions to Algonquin College during the past year, what would Taylor's tax credit on this charity contribution

Question 12 options:

	$144.00
	$126.00
	$90.00
	$112.00
	$94.00

Question 13 (2 points)

Assuming Taylor had decided to make the $4,000 RRSP contribution and makes the $800 charity contribution, how make would be their total tax bill from all sources of income.

Question 13 options:

	$28,201.46
	$26,706.00
	$27,899.20
	$30,143.55
	$29,075.20