Based on the Personal Income Tax Rate Components for 2017, answer the following:

a) Assuming only the basic personal tax credit, how much federal tax would an individual have to pay on $40,000 of taxable income in 2017?

b) How would the answer to (a) above change if the taxable income was $91,831?

c) Considering only federal taxes, if the same individual as (a) and (b) above had $91,832 of taxable income, what would the marginal and average tax rates be?

d) What is the combined federal and provincial marginal tax rate for an individual living in British Columbia who has taxable income of $250,000 in 2017? e) How much combined federal and provincial tax would an individual living in British Columbia have to pay on $100,000 of taxable income in 2017?

f) Suppose a husband and wife living in British Columbia were to each earn $50,000 (i.e. their family income is $100,000), how much combined federal and provincial tax would this family have to pay in 2017?

g) What is the difference in total tax owing to federal and provincial governments,
between (e) and (f) above? Why does this difference arise? What is the tax planning strategy that attracts taxpayers on account of this set of circumstances?

Answer rating: 100% (QA)

a Federal tax on 40000 of taxable income 933 4294 513 5740 b Federal tax on 91831 of taxable ... View the full answer