Assignment 1 – Preparing a basic tax return for a single person

Objective:

• Learn how to use the tax software.
• Study tax summary, tax return page 1, 2, 3, 4.
• Understand tax concept – taxable income, tax deductions and tax rates.

Instructions:

• Google, download and install the current version of Studio Tax Enterprise or TaxCycle onto your laptop.
• Input the personal information, you can just use your social insurance number and address.
• Input all tax slip (Attached to the bottom of this page).
• Read and study tax summary, T1 return pages 1,2,3,4
• Learn and try to understand tax concepts – taxable income, tax deductions and tax rates

Documents for Assignment

T4
T5
T4A
T4E
Tuition slip
Donation slip
RRSP contribution

Additional Questions To Complete:

1. What is considered taxable income? Provide 5 examples.
2. What is considered non-taxable income? Provide 2 examples.
3. What are tax deductions? Provide 2 examples.
4. Please briefly describe the difference between marginal tax rate and average tax rate.
5. What is the Federal marginal tax rate and the Ontario marginal tax rate for a taxable income of $50,000?
6. What is RRSP? How will RRSP save taxes?
7. How much is the tax saving by contributing $1000 into RRSP for clients with taxable income of $10,000, $30,000, $50,000 and $100,000?