Income Tax Implications Letter 2022

Running head: TAX
Tax
Name of the Student:
Name of the University:
Authors Note:

TAX
1
Memo
Date: 19th of April, 2020
To: Rosy Evans.
From: Tax adviser.
Sub: Discussion and recommendation on income tax implications
Rosy Evans is a resident of Canada and single accordingly, the income tax return of her has been
filed for 2019. As per the return of income tax filed for 2019 the total income of her is $88,895
with net income stood at $84,395. Total tax liability of Rosy for the year is $10,594.07 with tax
to be refunded to her is $1,629.93 as she has already paid tax instalments totalling to $12,000 in
the year 2019.
Tax implications of different income tax related matters:
Rose Evans is the mother of Rosy Evans. She is blind and fully dependant on her daughter with
mere income of $5,500. All medical expenses necessary for the treatment of her borne by Rosy
are to be deducted from the taxable income of Rosy as such expenditures are fully deductible.
However, all necessary conditions must be fulfilled by the tax payer to avail the benefit of
deducting such expenditures from her income.
In Canada RRSP contributions are fully allowed to be deducted in computing taxable income of
the tax payers. Hence, Rosy should have used the amount of $69,000 which she had room to be
contributed in RRSP. By failing to do so, Rosy has failed to reduce her taxable income and
income tax liability on such amount. Thus, whether $10,000, $20,000 or $69,000; the amount of