Question
TAX Employment Income : Jimmy was employed with Alberta Co . a public corporation as accountant for the last 5 years. During 20 20 ,
TAX
Employment Income:
Jimmy was employed with Alberta Co. a public corporationas accountant for the last 5 years. During 2020, his gross salary amounts of $70,000. For his good performance he awarded $20,000 bonus of total bonus he receives $12,000 in Dec 25, 2020 and the reminder to be paid January 2, 2021
During 2020, Jimmy employer deducts and withheld the following amounts from his salary:
Federal income Tax $10,000
Employment Insurance 858
Canada Pension Plan 2,594
Registered Pension Plan contributions 3,000
Union Dues 300
Donations to united way (Canadian Charity) 500
Personal use employer car 800
Contribution to Disability Pension Plan 1,000
Alberta co. policy to match their employees contributions to RPP and disability plans (at Dec 31, 2019 Jimmy hasaccumulated premiums in the plan amount of $2,000)
Other information:
Capital cost of the car | $45,200 |
Capital cost allowance claimed by company in 2020 Undepreciated Capital Cost (UCC)at Jan 1, 2020 | 3,000 21,000 |
Operating costs paid by the company | 8,300 |
The car was available for Jimmy from May 1, 2020, to the end of the year. He drove 52,000km, of which 40,000 for his employment duties. The company paid all operating costs amount of $8,300, but Jimmy pays the employer $100 a month for personal use of the car.
- Advanced accounting course tuition fees $1,200
- Music history course tuition fees (U of A) 600
- Payments of premiums on life insurance 2,400required by his Bank (to cover his personal mortgage)
Instructions:
Calculate Jimmys minimum net employment income for the year ending in Dec 31, 2020. In detailed notes, provide reasons for any items do not include in your calculations. Also, reason with calculation (if needed) for amounts included in your calculations. Including the ITA sections is a bonus.
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