Question 1

What is step 1 in computing taxable income and your tax liability?

Accepted Answer

A) Determine total income 
B) Calculate net income 
C) Calculating taxable income 
D) Calculate federal taxes owing 
E) Calculating Net Federal Taxes 
A) Determine total income 
B) Calculate net income 
C) Calculating taxable income 
D) Calculate federal taxes owing 
E) Calculating Net Federal Taxes A

Question 2

Retirement income from corporate pension plans and RRSPs; payments from government plans such as the Canada Pension Plan, Employment Insurance, or Old Age Security; and spousal and certain child support payments.

Accepted Answer

A) Employment 
B) Net business 
C) Investment 
D) Capital gains 
E) Other 
A) Employment 
B) Net business 
C) Investment 
D) Capital gains 
E) Other E

Question 3

Which of the following is a non-refundable tax credit?

Accepted Answer

A) Tuition and education amount 
B) GST and PST paid on purchases 
C) Moving expenses 
D) Life insurance premiums 
E) Basic personal amount 
A) Tuition and education amount 
B) GST and PST paid on purchases 
C) Moving expenses 
D) Life insurance premiums 
E) Basic personal amount A

Question 4

An exemption affects a person's tax situation by:

Accepted Answer

A) increasing the standard deduction. 
B) increasing the taxpayer's marginal tax rate. 
C) decreasing itemized deductions. 
D) reducing the taxpayer's taxable income. 
E) increasing tax-exempt income. 
A) increasing the standard deduction. 
B) increasing the taxpayer's marginal tax rate. 
C) decreasing itemized deductions. 
D) reducing the taxpayer's taxable income. 
E) increasing tax-exempt income.

Question 5

Deductions are amounts that a taxpayer is allowed to deduct from taxable income.

Accepted Answer

A) True 
 B)False

Question 6

What is the maximum withdrawal amount allowed under the Home Buyers' Plan?

Accepted Answer

A) $10,000 
B) $20,000 
C) $25,000 
D) $50,000 
E) $100,000 
A) $10,000 
B) $20,000 
C) $25,000 
D) $50,000 
E) $100,000

Question 7

Taxes are only considered in financial planning in April.

Accepted Answer

A) True 
 B)False

Question 8

Winning a $10,000 the lottery affects a person's tax situation by

Accepted Answer

A) increasing the standard deduction by $10,000. 
B) increasing the taxpayer's marginal tax rate to 50%. 
C) is taxed at the same rate as capital gains. 
D) is not taxed. 
E) is added to income and taxed accordingly. 
A) increasing the standard deduction by $10,000. 
B) increasing the taxpayer's marginal tax rate to 50%. 
C) is taxed at the same rate as capital gains. 
D) is not taxed. 
E) is added to income and taxed accordingly.

Question 9

Tax Free Savings Accounts have all the following characteristics except

Accepted Answer

A) The contribution limit is $5,000 per annum regardless of any amounts contributed to an RRSP/RPP. 
B) The $5,000 limit is indexed to the CPI and increases in multiples of $500. 
C) Contributions to a TFSA are tax deductible 
D) Any unused contribution room can be carried forward. 
E) Amounts can be withdrawn at any time and any amounts withdrawn can be re-contributed in the same year if one still has contribution room left over. 
A) The contribution limit is $5,000 per annum regardless of any amounts contributed to an RRSP/RPP. 
B) The $5,000 limit is indexed to the CPI and increases in multiples of $500. 
C) Contributions to a TFSA are tax deductible 
D) Any unused contribution room can be carried forward. 
E) Amounts can be withdrawn at any time and any amounts withdrawn can be re-contributed in the same year if one still has contribution room left over.

Question 10

Income from an activity that is carried out for profit, including income from a sole proprietorship, partnership, corporation, or profession, after expenses are deducted.

Accepted Answer

A) Employment 
B) Net business 
C) Investment 
D) Capital gains 
E) Other 
A) Employment 
B) Net business 
C) Investment 
D) Capital gains 
E) Other

Question 11

A tax on the value of automobiles, boats, or furniture can also be referred to as an investment tax.

Accepted Answer

A) True 
 B)False

Question 12

The ______________ property tax is based on the value of land and buildings.

Accepted Answer

A) personal 
B) real estate 
C) direct 
D) proportional 
E) regressive 
A) personal 
B) real estate 
C) direct 
D) proportional 
E) regressive

Question 13

What is the second most common type of tax filing error, of those listed?

Accepted Answer

A) Mathematical errors, such as adding or subtracting amounts incorrectly. 
B) Calculating and claiming provincial tax credits incorrectly. 
C) Claiming GST/HST credits incorrectly by using incorrect spousal income amounts. 
D) Claiming incorrect amounts as RRSP contributions. 
E) Forgetting to claim the age amount, or claiming it incorrectly. 
A) Mathematical errors, such as adding or subtracting amounts incorrectly. 
B) Calculating and claiming provincial tax credits incorrectly. 
C) Claiming GST/HST credits incorrectly by using incorrect spousal income amounts. 
D) Claiming incorrect amounts as RRSP contributions. 
E) Forgetting to claim the age amount, or claiming it incorrectly.

Question 14

Tax-exempt income has a greater financial benefit than tax-deferred income.

Accepted Answer

A) True 
 B)False

Question 15

"Grossed-up" Canadian dividends are multiplied by what amount in order to determine the level of taxable dividends?

Accepted Answer

A) 15% 
B) 18.97% 
C) 45% 
D) 50% 
E) 60% 
A) 15% 
B) 18.97% 
C) 45% 
D) 50% 
E) 60%

Question 16

An RPP differs from an RRSP in that

Accepted Answer

A) earnings on the RPP are tax free after five years. 
B) contributions may exceed $2,000 in the RRSP. 
C) an RRSP is set up by an employer for an employee. 
D) An RPP is set up by an employer for an employee. 
E) funds are only to be used for education expenses 
A) earnings on the RPP are tax free after five years. 
B) contributions may exceed $2,000 in the RRSP. 
C) an RRSP is set up by an employer for an employee. 
D) An RPP is set up by an employer for an employee. 
E) funds are only to be used for education expenses

Question 17

Income that is not subject to income tax includes:

Accepted Answer

A) the GST/HST rebate. 
B) the Canada child tax benefit 
C) gifts. 
D) lottery winnings. 
E) GST/HST rebates, Canada Child Tax benefits, gifts, and lottery winnings are not subject to income tax. 
A) the GST/HST rebate. 
B) the Canada child tax benefit 
C) gifts. 
D) lottery winnings. 
E) GST/HST rebates, Canada Child Tax benefits, gifts, and lottery winnings are not subject to income tax.

Question 18

A tax credit is an amount subtracted directly from the amount of taxes owed.

Accepted Answer

A) True 
 B)False

Question 19

Estimated quarterly tax installments must be made by those who

Accepted Answer

A) are employed in a foreign country. 
B) receive dividends. 
C) work for the government. 
D) owe year-end taxes of over $2,000 for both the current year and either of the two preceding y years. 
E) have been caught committing fraud. 
A) are employed in a foreign country. 
B) receive dividends. 
C) work for the government. 
D) owe year-end taxes of over $2,000 for both the current year and either of the two preceding y years. 
E) have been caught committing fraud.

Question 20

The main purpose of taxes is to

Accepted Answer

A) create jobs 
B) reduce the chances of inflation. 
C) generate revenue for funding government programs. 
D) discourage use of certain goods and services. 
E) decrease competition from foreign companies. 
A) create jobs 
B) reduce the chances of inflation. 
C) generate revenue for funding government programs. 
D) discourage use of certain goods and services. 
E) decrease competition from foreign companies.

What is step 1 in computing taxable income and your tax liability?

Retirement income from corporate pension plans and RRSPs; payments from government plans such as the Canada Pension Plan, Employment Insurance, or Old Age Security; and spousal and certain child support payments.

Which of the following is a non-refundable tax credit?

An exemption affects a person's tax situation by:

Deductions are amounts that a taxpayer is allowed to deduct from taxable income.

What is the maximum withdrawal amount allowed under the Home Buyers' Plan?

Taxes are only considered in financial planning in April.

Winning a $10,000 the lottery affects a person's tax situation by

Tax Free Savings Accounts have all the following characteristics except

Income from an activity that is carried out for profit, including income from a sole proprietorship, partnership, corporation, or profession, after expenses are deducted.

A tax on the value of automobiles, boats, or furniture can also be referred to as an investment tax.

The ______________ property tax is based on the value of land and buildings.

What is the second most common type of tax filing error, of those listed?

Tax-exempt income has a greater financial benefit than tax-deferred income.

"Grossed-up" Canadian dividends are multiplied by what amount in order to determine the level of taxable dividends?

An RPP differs from an RRSP in that

Income that is not subject to income tax includes:

A tax credit is an amount subtracted directly from the amount of taxes owed.

Estimated quarterly tax installments must be made by those who

The main purpose of taxes is to

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

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Exam 3: Planning Your Tax Strategy

What is step 1 in computing taxable income and your tax liability?

Retirement income from corporate pension plans and RRSPs; payments from government plans such as the Canada Pension Plan, Employment Insurance, or Old Age Security; and spousal and certain child support payments.

Which of the following is a non-refundable tax credit?

An exemption affects a person's tax situation by:

Deductions are amounts that a taxpayer is allowed to deduct from taxable income.

What is the maximum withdrawal amount allowed under the Home Buyers' Plan?

Taxes are only considered in financial planning in April.

Winning a $10,000 the lottery affects a person's tax situation by

Tax Free Savings Accounts have all the following characteristics except

Income from an activity that is carried out for profit, including income from a sole proprietorship, partnership, corporation, or profession, after expenses are deducted.

A tax on the value of automobiles, boats, or furniture can also be referred to as an investment tax.

The ______________ property tax is based on the value of land and buildings.

What is the second most common type of tax filing error, of those listed?

Tax-exempt income has a greater financial benefit than tax-deferred income.

"Grossed-up" Canadian dividends are multiplied by what amount in order to determine the level of taxable dividends?

An RPP differs from an RRSP in that

Income that is not subject to income tax includes:

A tax credit is an amount subtracted directly from the amount of taxes owed.

Estimated quarterly tax installments must be made by those who

The main purpose of taxes is to

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters