Danai and his partner, Alexi, both work in the social services sector. Danai earns an annual gross salary of $84,000 and is in a 35% tax bracket. Alexi earns an annual gross salary of $38,000 and is in a 25% tax bracket. (Ignore CPP, EI and Provincial taxes.) Each partner has an opening RRSP contribution room of $8,000 for 2016. Show your calculation details for full marks.

Required:

1. Calculate Danai’s net monthly pay and spendable income if he contributes $300 per month to his RRSP account. 

2. What will Danai’s RRSP contribution room be at the beginning of 2017? 

3. Calculate Alexi’s net monthly pay and spendable income if he contributes $200 each month to a tax-free savings account. 

4. What will Alexi’s RRSP contribution room be at the beginning of 2017?

Answer rating: 100% (QA)

1 Danais gross monthly pay is 7000 His taxes would be 98062 CPP would be 18750 and EI wo... View the full answer