Use the following information to answer questions 1-2

The Federal Tax Credit is 18.97%; the Provincial Tax Credit is 6.7%; Dividends must first be grossed up by 45%.

1- An Ontario resident earned $1,545 in dividends in 2009. His regular income was $176,000 and the Ontario dividend tax credit is 6.7%. Calculate the following: the dollar amount of the federal tax payable on dividends, the dollar amount of the provincial tax payable on dividends, and the total tax rate on dividends.

(Please provide detailed calculations)

2- Calculate the total tax bill and effective tax rate for an Ontario resident whose

regular income was $140,000 in 2009. (Please provide detailed calculations)
 

Federal Tax Rates Taxable income $0-37,178 37,179 - 74,357 74,358 120,887 120,888 and over Tax Rate 15.0% 22.0% 26.0% 29.0% Ontario Taxable Income $0-35,488 35,489 - 70,976 70,977 and over Tax Rate 6.05% 9.15 11.16