Taxes Payable - Personal

Question 1

Marginal tax rate

Answer 1

• rate payable on an additional dollar of income

Question 2

Non-refundable tax rate

Answer 2

• reduction of tax payable
• cannot carry forward if not used during year

Question 3

Refundable tax credit

Answer 3

• reduction of tax payable
• if tax payable = 0, leftover credit is refunded

Question 4

Credits: Special calculations

Answer 4

• medical expenses
• donation tax credit
• dividend tax credit
• foreign business and non-business income tax credit
• political contribution tax credit

Question 5

Non-refundable credits

Answer 5

• all included at 15%
• Basic - everyone
• Age - if 65 prior to year end
• Spousal - if supports spouse or common law partner
• Eligible dependent - not entitled to spousal but supports dependent
• Canada caregiver - supports infirm adult relative
• CPP amount paid and EI amount paid
• Canada employment - if earning employment income
• Disability - impairment restricting basic activity
• Adoption - if adopted a child
• Medical - expenses of self/spouse/children less than 18/other dependents
• Home accessibility - if older than 65 and eligible for DTC
• Pension - if older than 65 and have pension income
• Student loan interest - amount paid and no maximum
• Tuition - if eligible tuition

Question 6

Tax brackets in NS

Answer 6

range from 15% to 33%

Question 7

Medical expenses credit

Answer 7

= qualifying medical expenses - lesser of…
1) 3% of net income
2) $2421

Question 8

Donation tax credit

Answer 8

= (15% x first $200 donated) + (33% x lesser of charitable donations - $200 OR taxable income) + (29% x the remainder of donations to be deducted)

Question 9

Dividend tax credit

Answer 9

• Eligible: 6/11 of gross up (30% x dividend)
• Non-eligible: 9/13 of gross up (15% x dividend)

Question 10

Foreign non-business credit

Answer 10

• lesser of…
  1) foreign taxes actually paid
  2) canadian tax otherwise payable

Question 11

Foreign business credit

Answer 11

• lesser of…
  1) foreign tax actually paid
  2) Canadian tax otherwise payable
  3) tax otherwise payable - foreign non-business credit in PY

Question 12

Political contribution credit

Answer 12

= (75% on first $400) + (50% on next $350) + (33% on next $525)