Ch. 19 - Taxes Payable - Personal

Question 1

Federal Tax Brackets

- brackets and rate

Answer 1

1. 0 - 48,535 (15%)
2. 48,536 - 97,069 (20.5%)
3. 97,070 - 150,473 (26.0%)
4. 150,474 - 214,368 (29.0%)
5. 214,369 - over (33.0%)

Question 2

Non-Refundable Tax Credits

- ‘non-refundable’

Answer 2

• Do not create a refund if the amounts cannot be used

Question 3

Non-Refundable Tax Credits - Calculation

Answer 3

• Total the non-refundable credits and multiply by 15%

Question 4

Non-Refundable Tax Credits - Basic Personal Amount

Answer 4

1. 12,298 - 13,229

- available to everyone

Question 5

Non-Refundable Tax Credits - Age Amount

Answer 5

1. 7,637
   - available to those over 65
   - reduced by 15% of income over $38,508
   - can be transferred to a spouse

Question 6

Non-Refundable Tax Credits - Spousal or common-law

Answer 6

1. 12,298 - 13,229

- for someone who is supporting their spouse / partner

Question 7

Non-Refundable Tax Credits - Eligible Dependant

Answer 7

1. 12,298 - 13,229
   - not available is using spousal / partner
   - used for supporting relatives

Question 8

Non-Refundable Tax Credits - CPP

Answer 8

1. maximum is 2,732
   - Difference between
   (pensionable earnings - 3,500) x 5.25%; and
   (pensionable earnings - 3,500) x 4.95%

Question 9

Non-Refundable Tax Credits

EI Amount

Answer 9

1. maximum is 856

- Any amount greater than the required contribution is deducted

Question 10

Non-Refundable Tax Credits - Canada Employment Amount

Answer 10

1. 1,245

- basis is lesser of $1,245 and Canadian source employment income

Question 11

Non-Refundable Tax Credits - Medical expenses

Answer 11

1. medical expenses less the lesser of 3% of NI or 2,397

Question 12

Non-Refundable Tax Credits - Pension income amount

Answer 12

1. $2,000

- deduction is pension income up to $2,000 (straight line)

Question 13

Non-Refundable Tax Credits - Interest on student loans

Answer 13

1. no maximum

Question 14

Non-Refundable Tax Credits - Tuition

Answer 14

1. tuition paid

Question 15

Other Non-Refundable Tax Credits - ‘Other Non-Refundable’

Answer 15

• non-refundable tax credits not deducted at 15% of the amount

Question 16

Other Non-Refundable Tax Credits - Donations

Answer 16

• deduction limited to 75% of NI and donation amount
• calculated as:
  (15%xA)+(33%xB)+(29%xC)
  A = first $200
  B = lesser of 1) donations less $200; and 2) taxable income less $214,368
  C = excess of donations over A and B

Question 17

Other Non-Refundable Tax Credits - Dividend Tax Credit

Answer 17

1. Eligible - 6/11 of gross up which is 38%, or 20.73% of dividend
2. Ineligible - 9/13 of gross up which is 15%, or 10.385% of actual dividend

Question 18

Other Non-Refundable Tax Credits - Political Contributions

Answer 18

- calculated as:
(75%xA)+(50%xB)+(33%xC)
A = first $400
B = next $350
C = next $525

Question 19

Refundable Tax Credits - Canada Worker’s Benefit

Answer 19

• Available for low income persons / families

- reduced by 12% of net income over 1) 13,064 for individuals and 2) 17,348 for families

Question 20

OAS Clawback

Answer 20

clawback is lesser of:

1. OAS received
2. 15% of NI over 79,054

Question 21

EI Benefits Clawback

Answer 21

Clawback is 30% of lesser of

1. EI received
2. amount that the individuals income exceeds 1.25 times maximum yearly insurable earnings