This is based on Canadian taxes!

Question 1 Calculation of Tax Payable (10 marks) - Show Calculations

Joan Smith who is 35 years of age has Net Income for Tax Purposes (Division B) and Taxable Income (Division C) of $85,000. While most of her income is employment income also included in her taxable income is $10,000 in eligible dividends including the related gross-up. Her employer withholds maximum CPP contributions and EI premiums from her pay cheques. Joan is married to John who is 40 and whose Net Income for Tax Purposes (Division B) is $4,230. They have three children aged 7, 9, and 11. The children are all in good health and none of them have income of their own.

Required:

Calculate the federal income tax payable before tax credits, the maximum tax credits which can be claimed and the tax payable by Joan in 2020.