Federal Tax Rates for 2022: 15% on the first $50,197 of taxable income, plus ...

     

Transcribed Image Text:

Federal Tax Rates for 2022: • 15% on the first $50,197 of taxable income, plus • 20.5% on the next $50,195 of taxable income (on the portion of taxable income over 50,197 up to $100,392), plus • 26% on the next $55,233 of taxable income (on the portion of taxable income over $100,392 up to $155,625), plus • 29% on the next $66,083 of taxable income (on the portion of taxable income over 155,625 up to $221,708), plus • 33% of taxable income over $221,708 Amounts Related to Non-refundable Tax Credits: Description Basic personal amount for 29% tax bracket or lower Spousal amount for 29% tax bracket or lower Spousal amount for 29% tax bracket or lower (max. if eligible for Canada Caregiver amount for spouse/CLP) Canada employment amount (max.) Medical expense credit (3% of net income ceiling) Disability amount CPP/EI Contribution Limits for 2022: CPP/EI Maximum Contribution for 2022 for CPP tax credit for Enhanced contribution Total CPP contribution El contribution $3,039 $461 $3,500 $953 2022 $14,398 $14,398 $16,748 $1,287 $2,479 $8,870 Mr. Rainer is a senior accountant at ABC Co. His income from employment for tax purposes for 2022 is $90,000. Additional financial information about Mr. Rainer for 2022 includes the following: 1) Mr. Rainer received a $1,000 non-eligible dividend in 2022. 2) Mr. Rainer sold a collection of paintings for $25,000 in July 2022. The paintings were purchased 10 years ago at $10,000. 3) Mrs. Rainer has physical infirmity and is a dependent of Mr. Rainer. She works for XYZ Ltd. occasionally. Her Division B income is $8,000 for 2022. 4) ABC Co. deducted $4,453 CPP and El (including $461 enhanced CPP contribution) and $19,000 income tax from Mr. Rainers' paycheques in 2022. 5) Mr. Rainer contributed $5,000 to a TFSA account and purchased a 4% 3-year GIC with the fund. The first interest was received on June 30, 2022. 6) Mr. Rainer made a $800 donation to a local charity and received a receipt. 7) In 2022, Mr. Rainer paid eligible medical expenses of $7,500, which was not covered by an insurance plan, nor was it reimbursed. 8) Mr. Rainer had a rental loss of $1,500 in 2022. 9) At the end of 2021, Mr. Rainer had net capital losses from 2019 totaled $10,000, and non-capital losses from 2019 totaled $2,000. These losses could not be carried back to previous years. Required: (do not round intermediate numbers and round final numbers to the nearest dollar) Calculate Mr. Rainer's federal tax liability for 2022 in accordance with the appropriate ordering rules required by the Income Tax Act. Provide your answers to the following questions in the space provided: A. What is the subtotal amount of Par. 3(a)? B. What is the subtotal amount of Par. 3(b)? C. What is the subtotal amount of Par. 3(c)? D. What is the amount of Mr. Rainer's net income for tax purposes for 2022? E. What is the amount of Mr. Rainer's taxable income for 2022? F. What is the amount of Mr. Rainer's basic federal tax for 2022? G. What is the amount of Mr. Rainer's total personal tax credits for 2022? H. What amount of disability tax credit can Mr. Rainer claim for 2022? 1. What is the amount of Mr. Rainer's medical expense tax credit for 2022? J. What is the amount of Mr. Rainer's charitable girt tax credit for 2022? K. What is the amount of Mr. Rainer's federal tax liability for 2022? L. What is the amount of net capital losses left to be carried forward at the end of 2022? M. What is the amount of non-capital losses left to be carried forward at the end of 2022? Federal Tax Rates for 2022: • 15% on the first $50,197 of taxable income, plus • 20.5% on the next $50,195 of taxable income (on the portion of taxable income over 50,197 up to $100,392), plus • 26% on the next $55,233 of taxable income (on the portion of taxable income over $100,392 up to $155,625), plus • 29% on the next $66,083 of taxable income (on the portion of taxable income over 155,625 up to $221,708), plus • 33% of taxable income over $221,708 Amounts Related to Non-refundable Tax Credits: Description Basic personal amount for 29% tax bracket or lower Spousal amount for 29% tax bracket or lower Spousal amount for 29% tax bracket or lower (max. if eligible for Canada Caregiver amount for spouse/CLP) Canada employment amount (max.) Medical expense credit (3% of net income ceiling) Disability amount CPP/EI Contribution Limits for 2022: CPP/EI Maximum Contribution for 2022 for CPP tax credit for Enhanced contribution Total CPP contribution El contribution $3,039 $461 $3,500 $953 2022 $14,398 $14,398 $16,748 $1,287 $2,479 $8,870 Mr. Rainer is a senior accountant at ABC Co. His income from employment for tax purposes for 2022 is $90,000. Additional financial information about Mr. Rainer for 2022 includes the following: 1) Mr. Rainer received a $1,000 non-eligible dividend in 2022. 2) Mr. Rainer sold a collection of paintings for $25,000 in July 2022. The paintings were purchased 10 years ago at $10,000. 3) Mrs. Rainer has physical infirmity and is a dependent of Mr. Rainer. She works for XYZ Ltd. occasionally. Her Division B income is $8,000 for 2022. 4) ABC Co. deducted $4,453 CPP and El (including $461 enhanced CPP contribution) and $19,000 income tax from Mr. Rainers' paycheques in 2022. 5) Mr. Rainer contributed $5,000 to a TFSA account and purchased a 4% 3-year GIC with the fund. The first interest was received on June 30, 2022. 6) Mr. Rainer made a $800 donation to a local charity and received a receipt. 7) In 2022, Mr. Rainer paid eligible medical expenses of $7,500, which was not covered by an insurance plan, nor was it reimbursed. 8) Mr. Rainer had a rental loss of $1,500 in 2022. 9) At the end of 2021, Mr. Rainer had net capital losses from 2019 totaled $10,000, and non-capital losses from 2019 totaled $2,000. These losses could not be carried back to previous years. Required: (do not round intermediate numbers and round final numbers to the nearest dollar) Calculate Mr. Rainer's federal tax liability for 2022 in accordance with the appropriate ordering rules required by the Income Tax Act. Provide your answers to the following questions in the space provided: A. What is the subtotal amount of Par. 3(a)? B. What is the subtotal amount of Par. 3(b)? C. What is the subtotal amount of Par. 3(c)? D. What is the amount of Mr. Rainer's net income for tax purposes for 2022? E. What is the amount of Mr. Rainer's taxable income for 2022? F. What is the amount of Mr. Rainer's basic federal tax for 2022? G. What is the amount of Mr. Rainer's total personal tax credits for 2022? H. What amount of disability tax credit can Mr. Rainer claim for 2022? 1. What is the amount of Mr. Rainer's medical expense tax credit for 2022? J. What is the amount of Mr. Rainer's charitable girt tax credit for 2022? K. What is the amount of Mr. Rainer's federal tax liability for 2022? L. What is the amount of net capital losses left to be carried forward at the end of 2022? M. What is the amount of non-capital losses left to be carried forward at the end of 2022?

Answer rating: 100% (QA)

To calculate Mr Rainers federal tax liability for 2022 well go step by step through the provided information and apply the appropriate tax rules A Calculate the subtotal amount of Par 3a Mr Rainers em... View the full answer