Exam 3: Planning Your Tax Strategy

In 2009, Glenn is allowed to contribute $5,000 to a TFSA. He contributes $2,000 for that year. If he withdraws $1,000 the same year from the TFSA account, the following year:

A person with a total tax liability of $4,350 and withholding of federal taxes of $3,975 would:

____________ are expenses that a taxpayer is allowed to deduct from total income.

Taxable income is the total earnings of a person.

A tax credit of $50 for a person in a 28 percent tax bracket would reduce a person's taxes by

The basic personal amount is

What is the difference between the marginal tax rate and the average tax rate? In most cases, which rate is less? If your taxable income in 2004 was $50,000, what would be your federal taxes, marginal tax rate and average tax rate?

The use of legitimate methods to reduce one's taxes is tax ____________.

Cameron Nelson wants to complete his own federal income tax return. He has several questions about the tax form to use and what items should be reported as income. What sources of assistance would you recommend for Cameron?

Which of the following people is least likely to have to file a federal income tax return?

Taxes are not only considered in financial planning in April.

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

The main purpose of taxes is to

An RRSP, RPP, and IPP are examples of

Which type of tax expert would be of most value when you have a difference of opinion with the tax department?

An RPP differs from an RRSP in that

Taxable income is used to compute a person's

An example of a non-refundable tax credit is

Reductions from gross income for such items as registered retirement account contributions and RESP payments will result in

Income from a partnership is included under net business income.