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

• Question 5 (1 point)

  Saved

  What is the amount of taxes they would pay on their capital gains income? Assume a 40 percent tax rate.

  Question 5 options:

  	$575.00
  	$620.00
  	$600.00
  	$547.50
  	None of the Above

  Question 6 (1 point)

  Saved

  What is Dividend Gross Up amount on their dividend income?

  Question 6 options:

  	$1,640
  	$1,360
  	$1,045
  	$1,440
  	None of the Above

  Question 7 (1 point)

  Saved

  What would be the tax on the Dividend Gross Up amount? Assume a 40% tax rate.

  Question 7 options:

  	$576.00
  	$630.00
  	$555.52
  	$497.50
  	None of the Above