REQUIRED:
B. Determine the minimum Net Income For Tax Purposes that Mary will have to report for her 2020 taxation year. Provide reasons for omitting items that you have not included in your calculations. Determine the maximum deduction for child care costs and show your work. (11 marks)
Note: You do not need to show your calculations again for Employment Income. You can use the amount calculated in Part A.
REQUIRED:
C. Calculate the minimum Taxable Income that Mary will have to report for her 2020 taxation year. (2 marks)
Note: You do not need to show your calculations again for Net Income for Tax Purposes. You can use the amount you calculated in Part B.
REQUIRED:
D. Assume Marys Income for Tax Purposes is $75,000. Calculate Marys minimum Federal Tax Payable for 2020. (10 marks)
Mary Smith is 42 years of age and is a single parent with two children. She has a 14-year-old daughter, Grace, who has income from part-time jobs of $4,300 and a 6 year old son, Derek who has no income of his own. Both children are in good health Mary is a full time employee of ABC incorporated, a large publicly traded corporation. She has an annual salary of $85,000. In addition, she was awarded a $10,000 bonus based on her performance of the total $5,000 was paid in 2020 and the remainder is to be paid on January 15, 2021. During 2020, her employer withheld the following amounts from her earnings: Registered Pension Plan Contributions $3,500 CPP Contributions 2,898 El Premium 856 Union Dues 675 Charitable Donations 2.200 In addition to her salary, the Company paid the following employee benefits on Mary's behalt: Company Pension Contributions $3,500 Dental Insurance Premium 625 Other Information: 1. Mary's mother, Kate, who is 74 years old and physically intiem, lives with the family. Her Net Income for Tax Purposes for 2020 is $20,400. 2. Mary has the full use of a company automobile that the Company testes for an annual payment of $5,200. ABC Incorporated paid all of the $4,300 in operating costs. During the year, Mary drove the car 21,000 kilometers, of which 7,000 kilometers were for employment purposes a. In 2018. Mary and her husband were divorced. The terms of their settlement require that her former spouse pay $700 per month in child support and $300 per month in spousal support. During 2020, he made 10 monthly payments totaling $10,000 4. Mary also received the following additional amounts in 2020 Inheritance 25,000 TFSA withdrawal 3,000 6. Mary uses a national agency to provide full time child care. The 2020 costs for the two children total $13,250. In addition, Grace attended a summer camp for four weeks during 2020. The cost of this camp is 5500 per week. During the period when Grace is at camp, Mary incurs additional costs for care of Derek of $700. This $700 is not included in the $13,250 paid to the national agency 6. At the end of 2020, Mary has undeducted RRSP contributions of $5,400. She has determined that her 2020 RASP deduction limit is $7,800, 7. Mary has a non capital loss carry over from 2019 in the amount of $2,500 that she would like to use in the current year. REQUIRED: A. Determine the minimum Net Employment Income that Mary will have to report for her 2020 taxation year. Provide reasons for omitting items that you have not included in your calculations (9 marks Mary Smith is 42 years of age and is a single parent with two children. She has a 14-year-old daughter, Grace, who has income from part-time jobs of $4,300 and a 6 year old son, Derek who has no income of his own. Both children are in good health Mary is a full time employee of ABC incorporated, a large publicly traded corporation. She has an annual salary of $85,000. In addition, she was awarded a $10,000 bonus based on her performance of the total $5,000 was paid in 2020 and the remainder is to be paid on January 15, 2021. During 2020, her employer withheld the following amounts from her earnings: Registered Pension Plan Contributions $3,500 CPP Contributions 2,898 El Premium 856 Union Dues 675 Charitable Donations 2.200 In addition to her salary, the Company paid the following employee benefits on Mary's behalt: Company Pension Contributions $3,500 Dental Insurance Premium 625 Other Information: 1. Mary's mother, Kate, who is 74 years old and physically intiem, lives with the family. Her Net Income for Tax Purposes for 2020 is $20,400. 2. Mary has the full use of a company automobile that the Company testes for an annual payment of $5,200. ABC Incorporated paid all of the $4,300 in operating costs. During the year, Mary drove the car 21,000 kilometers, of which 7,000 kilometers were for employment purposes a. In 2018. Mary and her husband were divorced. The terms of their settlement require that her former spouse pay $700 per month in child support and $300 per month in spousal support. During 2020, he made 10 monthly payments totaling $10,000 4. Mary also received the following additional amounts in 2020 Inheritance 25,000 TFSA withdrawal 3,000 6. Mary uses a national agency to provide full time child care. The 2020 costs for the two children total $13,250. In addition, Grace attended a summer camp for four weeks during 2020. The cost of this camp is 5500 per week. During the period when Grace is at camp, Mary incurs additional costs for care of Derek of $700. This $700 is not included in the $13,250 paid to the national agency 6. At the end of 2020, Mary has undeducted RRSP contributions of $5,400. She has determined that her 2020 RASP deduction limit is $7,800, 7. Mary has a non capital loss carry over from 2019 in the amount of $2,500 that she would like to use in the current year. REQUIRED: A. Determine the minimum Net Employment Income that Mary will have to report for her 2020 taxation year. Provide reasons for omitting items that you have not included in your calculations (9 marks
