FINA 350 Taxation and financial Pan

Case #1 – Individual Tax Return (5 marks)

Mr. Chan is employed by a large public corporation and for 2020 his salary was $_60,000_______.  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 2020, his employer withheld the following amounts from his compensation:

EI Premiums $856.36

CPP Contributions $2,898.00

Income Tax Deducted                                                             $5000______

He also made RRSP contributions of $100 a month for the year and had enough contribution room. Last year he had non-capital losses of $1,200________ that he could not use in 2019 and was carry forward to 2020.  

Mr. Chan owns 1,000 preferred shares of Iron Works shares, a publicly-traded taxable Canadian corporation and received four dividend payments of $82 and sold his shares and received proceeds of disposition of $36 per share and his adjusted cost base for each share was $20. Mr. Chan also received interest payments totaling $565 based on his balance in his savings account at the same bank and had carrying charges of $180.

Mr. Chan is the sole provider for the family and Ying his wife works part time and had a Net Income of $8,200. They have two young children Lois and Arsenio aged seven and eleven and paid medical expenses of $2,650 in 2020. He also contributed to various charities in the amount of $450 and his wife contributed $80 to local charities.

Required:

Determine Mr. Chan’s Total Income, Net Income, Taxable Income, and the Net Federal Tax owing or refund for 2020 not including Provincial Taxes.

Case #2 – Canadian Tax System

Compare the Canadian income tax system with another nation’s tax system.  Examine and describe current tax laws, concepts or calculations of a nation of your choice and discuss the similarities and differences with Canada’s tax system like:

- Individual marginal tax rates and tax brackets

- Individual deductions and credits

- Corporate or business taxation

Your answer should be approximately 2 - 4 pages and contribute to future tax planning for international financial service clients.