Winter 2020 FIN 3020 Tax Project Analysis for Rosy Evans

This document presents a tax project analyzing the tax situation of Rosy Evans, a Canadian resident. The analysis includes a calculation of her total income, net income, and tax liability for 2019, along with a determination of her eligibility for a tax refund. The project offers detailed advice on various tax matters, such as medical expenses, RRSP contributions, executive MBA expenses, and the tax implications of TFSA savings. It also covers employment income calculations, including car benefits and stock options. Furthermore, the project addresses Rosy's rental income from a six-plex property, detailing rental income and related expenses such as hydro, water, mortgage interest, property taxes, and maintenance. The analysis provides a comprehensive overview of her tax situation and offers valuable insights into optimizing her tax return.

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

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TAX
Memo
Date: April 19, 2020.
To: Rosy Evans.
From: (Name of the student), Tax expert.
Sub: Advice on income tax return and on tax matters
Rosy Evans being a Canadian resident is subjected to the income tax provisions applicable to the
citizens of the country hence, the amount of taxable income and income tax liability of her has
been calculated accordingly. As per the IT return of Rosy for 2019 her total income is $93,895
and net income is $89,395. The tax liability of the tax payer for the year is $12,108.88. She has
already paid tax instalments of $12,000 along with $224 as incentive for climate action hence,
she is eligible for a tax refund of $115.12 for the year from the Treasury.
Tax advice on different items:
Medical expenses paid for disable and dependant person by the tax payer is subjected to
deduction only if all necessary terms and conditions have been fulfilled. Since, no details have
been given about the compliance of such conditions by Rosy hence, only the standards amount of
$4,500 has been deducted from gross taxable income of Rosy to compute her net taxable income.
Contributions by the tax payers in certain funds including RRSP are allowed as deduction in full.
Rosy had a room of $69,000 to contribute to RRSP however, she hasn’t hence, she has lost an
opportunity of reducing her taxable income and tax liability on such income. Had she contributed
in RRSP the amount of taxable income of her and resultant tax liability both would have been
proportionately lower by the amount of contribution.

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Executive MBA requires payment of tuition fees and course fee both are eligible expenditures
and allowed to be deducted from gross income of a tax payer top calculate his or her taxable
income and tax liability on such income. Thus, the amount of tuition fees and course fee eligible
for executive MBA would be allowed as deduction. The income liable to be taxed and resultant
tax liability both will be reduced subsequent to these deductions for the executive MBA.
Savings in TSFA account is completely tax free for residents of Canada hence, the taxpayers in
the country will be able to tax advantage by investing in such savings account. Also withdrawals
from the account is tax free thus, the tax payer will be able to take tax advantage by savings in
TSFA.
Car provided to the employee by the employer if available to the employee for his or her
personal use then the proportion of total cost associated for the personal use of such car will be
included in computing employment income of the employee. Since, 90% of the total km ran by
the car during the year was for personal used hence, 90% of total operating expenses and car
rental shall be included in computing taxable income from employment. $12,510 is the amount
in this case to be included in employment income of the employee.
$3,250 derived from following is to be included to compute employment income of the
employee:
{(100000 x 3% x 1/12) + (100000 x 4% x 9/12)}.
ABC Ltd. is a company hence, stock option vested on employee is to be included in computing
the employment income of the employee however, no such treatment would have been required
had the ABC Ltd been a CCPC.

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