Use the rates in this table to answer the questions below:

	Rates of Federal Income Tax
Tax Rates	From	to
15%	0	$47,630
20.50%	$47,630	$95,259
26%	$95,259	$147,667
29%	$147,667	$210,371
33%	$210,371	-

Sam has a salary of $98,000 from her employer at DD corporation. She has invested $100,000 in a bond fund and receives $1,500 in distributions from the fund. Sam has a daughter which she sends to childcare while she is working and this costs $11,000 p.a. She also puts $300 each month into her RRSP. Her non-refundable tax credits total $2500 p.a. Finally, Sam has purchased a new iPad for $1000 for her daughter.

TASKS:

1) Calculate the amount of taxable income that Sam should have on her tax return (show your workings)? (5 points)

2) Calculate the amount of federal tax that Sam will pay (show your workings)? (5 points)

3) Explain to Sam what a progressive tax rate system is. Which tax rate is most relevant for her to consider when making future investments? (5 points)

4) Sam is worried about inflation and tax on her investments. Explain to Sam why moving investment to an ABC equity fund might reduce worries with inflation and tax. (4 points)

5) Using one sentence for each, explain the THREE most important factors that should be considered before Sam makes an investment into an equity fund? (6 points)