Mr. Chandra is employed by a large public corporation and for 2019 his salary was $98,000. He was a member of the company’s pension plan and his contributions were matched by his employer. He contributed $800.84 to the plan and the amount shown on his T4 slip along with an entry of $1,601.68 in box 52 representing his pension adjustment. Union dues were deducted of $750.

During 2019, his employer withheld the following amounts from his compensation:          

EI Premiums ...................................$860.22

CPP Contributions.......................$2,748.90

Income Tax Deducted...................$15,000

He also made RRSP contributions of $200 a month for the year and had enough contribution room. Last year he had non-capital losses of $800 that he could not use in 2018 and was carryforward to 2019.

Mr. Chandra owns 1,000 preferred shares of Iron Works shares, a publicly-traded taxable Canadian corporation and received four dividend payments of $122 and sold his shares and received proceeds of disposition of $36 per share and his adjusted cost base for each share was $20. Mr. Chandra also received interest payments totaling $1,000 based on his balance in his savings account at the same bank and had carrying charges of $95.

Mr. Chandra is the sole provider for the family and Tess his wife works part time and had a Net Income of $7,800. They have two young children Lois and Arsenio aged seven and eleven and paid medical expenses of $2,650 in 2019. He also contributed to various charities in the amount of $90 and his wife contributed $80 to local charities.

Required:

Determine Mr. Chandra’s Total Income, Net Income, Taxable Income, and the Net Federal Tax owing or refund for 2019 not including Provincial Taxes.

Answer rating: 100% (QA)

Computation of Total Income Salary Income 116000 EI premium withheld860 CPP contribution withh... View the full answer