Detailed Income Tax Implications Report for Rosy Evans, 2019

This report analyzes the income tax implications for Rosy Evans, a resident of Canada, based on her 2019 income tax return. The report addresses various aspects of her tax situation, including the deductibility of medical expenses for her mother, the benefits of RRSP contributions, and the tax advantages of investing in a TFSA. It also examines the impact of employment income, including car benefits and concessional loans, on her overall tax liability. The report highlights potential tax-saving strategies, such as maximizing RRSP contributions and understanding the tax implications of her future MBA program. The analysis includes specific calculations related to employment income and provides recommendations for optimizing her tax position. The report also discusses the tax treatment of car benefits, including the calculation of taxable benefits based on personal use. Overall, the report provides a comprehensive overview of Rosy Evans' tax situation and offers actionable insights for tax planning.

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

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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

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contribution in RRSP would have allowed Rosy to reduce her taxable income and resultant
income tax liability proportionately.
The lifelong plan of enrolling for an executive MBA program will make Rosy eligible to deduct
tuition fees and course fees from the gross income of her to ascertain her taxable income and
resultant income tax liability on such income. Thus, whenever she decides to enrol to the MBA
program, she will be eligible to deduct the course fee and tuition fees from her gross income to
reduce her taxable income and income tax liability for the period.
Investment in TSFA is completely tax free for the residents of the country hence, by investing in
TSFA a taxpayer would be in a position to use the tax advantage available for both savings and
withdrawals.
Employers sometimes provide employees with car. Such car whether owned by the employer or
taken loan will be considered for calculation of employment income if the car is available for
personal use of the employee. In this case 90% (1800 x 100/2000) of the total km ran by the car
was for personal purpose hence, 90% of total expenses related to the car will be included with
other employment benefits to compete employment income of the employee. The calculation of
the amount to be included is given below:
(11400 x 90%) + (2500 x 90%) = $12510.
Loan provided at concessional rate will also increase the employment income of the employee to
the tune of $3,250 as can be shown from the following calculation:
{(100000 x 3% x 1/12) + (100000 x 4% x 9/12)}.

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No stock option would have to be considered for calculation of employment income of an
employee even if stock option is granted by a CCPC.