For 2019, Mr. Mason Boardman has combined federal and provincial Tax Payable of $62,350. For this year,
Question:
For 2019, Mr. Mason Boardman has combined federal and provincial Tax Payable of $62,350. For this year, his employer withheld $61,600. For 2020, his combined federal and provincial Tax Payable is $17,760. For this year, his employer withheld $13,740. For 2021, he anticipates having a combined federal and provincial Tax Payable of $49,370. He expects that his employer will withhold $41,390. In January 2021, you are asked to provide tax advice to Mr. Boardman. He has asked you whether it will be necessary for him to pay installments in 2021 and, if so, what the minimum amounts that should be paid are, along with the dates on which these amounts are due. Assume that his estimates for 2021 will be accurate.
Required:
Provide the information requested by Mr. Boardman. He would like to know what the amount (and dates) of installments are under all three options and which is the best option you would recommend. Show all your calculations.
Fundamentals of Corporate Finance
ISBN: 978-1259024962
6th Canadian edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim