Ms. Haddie (DOB: January 1, 1980) comes to you for advice in February 2022. Last year, 2021 was a year of considerable change and turmoil for her. Her job in Waterloo, with Takemeover Ltd., evaporated on March 31, 2021, as a result of a reorganization of the company's business after a merger with a competitor. She found another job in Dundas (an improvement) at Newco Ltd., but it required her to move there. On May 15, 2021 she relocated from Waterloo ON to Dundas ON. She started her new employment position on June 1, 2021.

Due to covid, both employers allowed her to work from home throughout her employment period. Her divorce from her former husband became final during 2019. Ms. Haddie, who was already a single parent of a nine-year-old daughter (Camilla, DOB: May 26, 2012), decided to adopt a five-year-old son (Ross, DOB: April 10, 2016) locally on May 1^st of 2021. The court costs, legal cost, and administrative costs for the adoption were $17,000.

Other information on receipts and benefits:

Salary earned in 2021 ($50,000 in Waterloo, $74,000 in Dundas)	$124,000
Profit from sale of cosmetics at home parties held in spare time	7,000
Interest on Canada Savings Bonds Dividends from Holding Company that she owns with ex-husband US $ Dividends from US corporation (net of withholding of US $50)	1,725 5,000 450
Spousal support pursuant to divorce agreement ($600 per month for her support and $450 per month for the support of her daughter, age 9)	12,600
Moving allowance	4,500

Disbursements and withholdings:

Employment Insurance premium withheld	890
Canada Pension Plan contributions withheld	3,166
Union dues	750
Net rental loss (for tax purposes) on investment property	(4,800)
Registered retirement savings plan contributions, made on February 14, 2022 (2020 earned income was $145,000). She has previously contributed the Masximum amount of RRSP deductions (ie. 2020 deduction limit is 0)	30,000
Registered education savings plan payments 2021 ($60 per month)	720
Tuition fees for 4 months part-time at University of Waterloo	3,910
Payment on cancellation of lease for Waterloo apartment	575
Security deposit on apartment in Dundas	475
Gasoline and direct car expenses incurred in move to Dundas (92 km)	40
Trailer rental for move to Dundas (including one-way drop-off fee of $75)	190
Cost of shipping remainder of household effects (including packing and unpacking fees of $1,500); paid to MoversRUs	2,600
Cost of hotel ($125) and meals ($55) in Hamilton while awaiting delivery and unpacking of household effects (one day)	180
Payment to babysitter for care of both children after school (38 weeks @ $100 per week) and during school holidays (8 weeks @ $500 per week)	7,800
Summer camp for children (4 weeks @ $300 per week)	$1,200 each

Required:

Part 1
Determine Ms. Haddie's taxable income for 2021 on the assumption that she wishes to pay the least amount of tax possible. Calculate the taxes payable, and the net amount owing or refundable. For this section, you do not need to calculate the Ontario taxes. You can use the amount calculated by Cantax once you complete Part 3. 

Show all your calculations. Provide references for all items. 

Explain why you omitted any of the above information from your calculations. Cite ITA provisions, or any other applicable sources. 

Answer rating: 100% (QA)

To determine Ms Haddies taxable income for 2021 and the taxes payable well need to consider her various sources of income deductions and credits Lets ... View the full answer