Jamal is a self-employed plumber. He bills his clients $60,000 a year. Total business expenses amount to

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Jamal is a self-employed plumber. He bills his clients $60,000 a year. Total business expenses amount to $10,000 a year. His only eligible income tax deduction is $5,000 for an RRSP contribution. If the first $36,000 of taxable income is taxed by the Federal Government at a rate of 15% and levels up to approximately $70,000 are taxed at 22%, what is his federal tax liability before considering tax credits? (Show your calculations).

B. George had earnings from his salary of $50,000, interest on savings of $2,000, and a contribution to a registered retirement saving plan of $2,000. What is his net income?

C. Would you prefer a fully taxable investment account earning 8.5% or a tax-exempt investment account earning 5.5%? Why? Assume a combined 2018 marginal tax rate of 43.41%