Tax Report: Analyzing Miss Rosy Evans' Income and Tax Liability

This report analyzes the income tax implications for Miss Rosy Evans, focusing on her 2019 tax year. Her total income was $95,895, with a net income of $91,395 and a calculated tax liability of $12,667.08. After accounting for tax payments and the climate action incentive, the payable amount was $443.08. The report discusses the impact of her dependent, RRSP contributions, and executive MBA expenses on her tax liability. It also explores the tax advantages of TFSAs and the inclusion of employment benefits, such as a company car, in her income. The report also determines the tax implications of a concessional rate loan provided by the employer. The analysis provides insights into how Miss Evans could have optimized her tax planning and reduced her overall tax burden by considering various deductions and investment strategies.

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

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MEMO
Date: April 19, 2020
To: Rosy Evans.
From: Tax expert.
Sub: Income tax return and related issues
Total income of Miss Rosy Evans for financial year 2019 is $95,895 according to her income tax
return. The net income of her for the period is $91,395. The amount of tax liability on the taxable
income of her for the period is $12,667.08. The amount of tax payable for the period though is
$443.08 as she has already paid $12,000 as tax instalments and there is climate action incentive
of $224 for the year.
Discussion on tax implications:
Rosy has a physically disable (blind) mother who is completely dependent on her. However,
even medical expenses incurred on physically disable and dependant mother are not fully
allowed as deduction except when all conditions have been complied with by the tax payer. In
this case since, there is no information on compliance of these issues hence, only $4,500 has
been deducted as standard support deduction for computing taxable income of Rosy for the year
2019.
RRSP contributions are fully allowed as deduction hence, any amount subject to maximum
amount contributed to such fund is allowed to be deducted from total income to determine
taxable income of a tax payer. Since, Rosy had a room of $69,000 for RRSP contribution hence,
her taxable income could have been reduced by as much as that amount provided all other

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conditions have been met. The resultant income tax liability would have been automatically
lower as the taxable income would have been reduced.
The executive MBA related expenditures (eligible expenditures) including tuition fees, course
fees are allowed as deduction for computation of taxable income of the tax payer. Hence, both
taxable income and income tax liability of the tax payer will be reduced if the executive MBA
course is undertaken by the taxpayer.
Canadian residents can take tax advantage by investing in the TSFA that allows tax free savings.
The withdrawal from TSFA is also tax free provided necessary conditions are fulfilled. Thus, the
tax payer could have reduced both her taxable income and income tax liability saving in the
TSFA.
Car provided by an employer to the employees is an employment benefit and must be included in
computation of employment income of the employee if the car is available for personal use of the
employee. Here 1800 km out of 2000 km that the car has ran during the period of 2019. Thus,
90% of total expenditures including car rental and operating cost shall be included as
employment income of the employee to whom the car was made available. $12,510, i.e. (11400
x90%) + (2500 x 90%) will be included in the employment income of the employee for the
period in which the car was provided to the employee.
An amount of $3,250 shall be added with other income from employment of the employee for
concessional rate of loan provided to the employee by the employer.
No effect would have been there to the employment income of the employee in case ABC Ltd
would have been a CCPS.

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