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43 Cards in this Set

  • Front
  • Back
The main purpose of taxes is to
generate revenue for funding government programs
The use of legitimate methods to reduce one’s taxes is tax
avoidance
The ____________ property tax is based on the value of land and buildings
real estate
An exemption affects a person’s tax situation by
reducing the taxpayer’s TI
Taxable income is used to compute a person’s
income tax
Which of the following would result in a reduction of taxable income
union dues
Money received by an individual for personal effort is ____________ income
earned or employment investment
Money received in the form of dividends or interest is _______________ income
investment
Earnings from a limited partnership would be an example of ____________income
net business income
Income that is not subject to income tax includes:
GST and HST rebates, child tax benefits, gifts, lottery winnings
Which of the following would be excluded from total income to obtain net income
child support payments
Reductions from gross income for such items as registered retirement account contributions and RESP payments will result in
net income
Winning the lottery affects a person’s tax situation by
having no influence at all on taxable income
Which of the following is a standard tax credit?
the basic personal amount
_____________ are expenses that a taxpayer is allowed to deduct from total income
deductions
An expense that would be included in the deductions of a taxpayer is
union and professional dues
The basic personal amount is
a tax credit
A tax _________ is an amount subtracted directly from the amount of taxes owed
credit
Which of the following is an example of a tax credit?
caregiver and medical expenses
A tax credit of $50 for a person in a 28% tax bracket would reduce a person’s taxes by
$50
Most people pay federal income tax by
having amounts withheld from source
Estimated quarterly tax installments must be made by those who
owe year-end taxes of over $2000 for both the current year and either of the 2 preceding years
Which of the following people is least likely to have to file a federal income tax return
a person earning less than $9600
A person with a total tax liability of $4350 and withholding of federal taxes of $3975 would:
owe $375
The financial planning objective is to
maximize after-tax cash flows
Which type of tax expert would be the most value when you have a difference of opinion with the tax department
a tax attorney
Making use of legitimate methods to reduce one’s taxes is called tax___________.
planning
An example of a non-refundable tax credit is
student loan interest fees
An example of a tax-exempt investment is
a gain on the sale of your home
Capital gains refer to
gains from the sale of capital assets
Sheira Harvey worked in Poland for part of the year and earned $50000 while she was there. This income will not be included in her income for the year. This represents:
an exclusion
An RPP differs from an RRSP in that
an RPP is set up by an employer for an employee
An RRSP,RPP, and IPP are examples of
tax-deferred retirement plans
“grossed-up” Canadian dividends are multiplied by what amount in order to determine the level of taxable dividends?
18.97%
Which of the following is a non-refundable tax credit
tuition and education amount
To help you cope with taxes, common goals related to tax planning include all the following except:
minimizing taxes
Tax freedom day occurs:
the time in the year when your income has paid the portion of taxes imposed by all levels of the govenment
Tax records should be kept for a min of _______years from the date you receive your noa
3 years, 6 years, or indefinitely depending on the type of record
Beginning in 2009 Canadian residents 18 and older are allowed to contribute __________ per year to a TFSA
$5000
Contributing $2000 to an RRSP changes the TFSA contribution by;
does not reduce the TFSA contribution limit
The tax free savings account contribution limit
is indexed to the CPI and increases in multiples of $500
Tax free savings accounts do not have the following characteristic:
contributions to TFSA are tax deductible
In 2009, glenn is allowed to contribute $5000 to a TFSA. He contributes $2000 for that year. If he withdraws $1,000 the same year from the TFSA account, the following year
$4000 contribution room is added to the 2010 TFSA limit