Mr. Queen is employed by a public company located in Vancouver. During 2021, his basic gross salary
Question:
Mr. Queen is employed by a public company located in Vancouver. During 2021, his basic gross salary amounts to $70,000. In addition, he was awarded an $30,000 bonus based on the performance of his division to be paid March 31,2022.
During 2021, Mr. Queen' employer withheld the following amounts from his gross wages:
Federal Income Tax $3,000
EI Premiums 890
CPP Contributions 3,166
RPP Contributions 3,500
Donations to a registered charity 480
Union dues 450
Payments for personal use of company car 2,000
Other Information:
1. As a result of work related injury, Mr. Queen was in a hospital for two full months of 2021. The group disability insurance coverage is fully covered by the employer. As a result Queen received a total of $5,300 in payments during this period. All of the premiums for this insurance plan are paid by the employer. The plan provides periodic benefits that compensate for loss of employment income.
2. Mr. Queen is provided with a car that the company leases at a rate of $900 per month, including both GST and PST. The company pays for all of the operating costs of the car and these amounted to $3,500 for 2021. Mr. Queen drove the car a total of 35,000 kilometers in 2021, 25,000 kilometers of which were carefully documented as use for employment purposes and 10,000 for personal use.. While he was in the hospital (see Item 1), his employer required that the car be returned to company premises.
3. On January 15, 2020, Mr. Queen received options to buy 350 shares of his employer's common shares at a price of $22 per share. At this time, the shares were trading at $18 per share. Mr. Queen exercised these options on July 6, 2021, when the shares were trading at $28 per share. He does not plan to sell the shares for at least a year.
4. Other disbursements made by Mr. Queen include the following:
Advanced financial accounting course tuition fees $1,200
History of Chocolate course tuition fees 600
Mr. Queen' employer reimbursed him for the tuition fees for the accounting course. The reimbursement was not included as a taxable benefit on his T4.
5. Mr. Queen is a widower. His wife was killed in a car accident 2 years ago that injured his 8 year old son, Dan, so badly that he qualifies for the disability tax credit. Dan has no net income for the year.
6. Mr. Queen' mother, Eve, lives with Mr. Queen and cares for Dan. Eve is 67 years old and her net income is $7,500. Eve refused to take any payments for caring for Dan as she received a large inheritance in the previous year. As a result, Mr. Queen did not pay any child care or attendant costs for Dan.
7. Mr. Queen paid the following eligible medical costs:
For Himself $ 9,300
For Dan 2,450
For Eve 1,265
Total $13,015
Required:
Calculate, Mr. Queen' 2021 employment income, net income, taxable income and federal income tax payable or refund. Ignore the CPP additional deductible
