Prepare a tax return (Individual –basic)
Instructions;
Arinder Smith is a junior accountant in Toronto. He has requested your help with completing his personal tax return (T1) for 2021.
During 2021, his employer provided him with the following:
• Paid him a salary of $70,000.
• A fantastic job performance review. His boss has told him to expect a bonus payout of $5,000 in February 2022 and a salary increase of 10% in March 2022.
• A contribution to the company RPP of $6,000.
• Group term life insurance coverage of $100,000; the premium for the coverage is $400.
• Group sickness or accident insurance coverage; the premium paid is $550.
• A private health services plan that provides Arinder with dental, vision, prescription drugs, and private-hospital room coverage; the premium is $800.
• Mental health counselling for Arinder’s daughter; the psychologist’s fee is $1,500.
• Fitness club membership for Arinder’s personal enjoyment; the membership dues are $900.
• Public transit pass for city bus; the annual cost is $800.
• He paid membership dues of $1,200 to the Canadian Association of Public Accountants
• His employer was so happy with his work that he also awarded Arinder and his family with an all expenses paid trip to Club Med for one week. The value of the trip is $3,000.
• His employer required him to take some courses to maintain his designation which were also required for his job. The cost of the courses was $1,500.
Some basic facts to know about Arinder.
• He is married and has one child (a daughter, Maria).
• His wife does not work.
• His daughter is 12 years old attending public school.
• He is eligible to take all deductions.
To complete:
Q1. Determine the amount to be included in Arinder’s employment income for tax purposes for 2021.
Q2. Complete the TD1ON, TD1FED.
Q3. Mockup a T4 for Arinder using the PDOC tables.
Q4. Complete a basic T1 for Arinder for 2021