Question
Tim is 40 years old. He earned $112,000 in 2020 at his job as a Certified Electrician. His CPP and EI contributions totaled $3,609. Liz,
Tim is 40 years old. He earned $112,000 in 2020 at his job as a Certified Electrician. His CPP and EI contributions totaled $3,609. Liz, Tim's wife was enrolled full-time student in university. Liz has no income and her tuition fees were $8,000. During the year Tim enrolled in part-time studies at the university and paid tuition fees of $1,500.The following additional events occurred during 2020:
- $2,000 donation to a registered charity
- $800 to a federal political party.
- $4,500 on eyeglasses, dental care, and prescriptions (none were reimbursed)
- $2,000 non-capital loss from 2018 is available
- $15,000 capital loss from 2017 is also available
- Liz is pregnant with twins who will be born in March 2021
Calculate
A. Calculate his taxable income for 2020.
B. Calculate his federal tax liability for 2020
C. Any recommendation to give to Tim on potential tax minimization strategies?
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