Canadian taxation case
The assignment is kind of a taxation case about forms, case study and a short cover letter.
This assignment requires you to complete a T1 General2013for a client, plus the provincial and federal tax schedules, any other relevant schedules, and calculate an RRSP deduction for a client.A marking rubric will be posted in advance of the due date. Forms available online at www.cra.gc.ca
Step 1 Write a client case study.The case description should cover all relevant information so that if I completed an income tax return based solely on the written information describing the case, I would be able to do it completely and correctly.
Include the following variables:
o Name, Occupation, Age, other ID as required to fully complete the T1 General
o Must include employment income with payroll deductions of appropriate amounts and credits PLUS at least two moredifferent types of income for 2013 – eg interest, rent, dividends, etc.
o Calculate and deduct the maximum RRSP contribution for 2013. Assume the client has always fully used his maximum contribution to RRSP in the past (no carry forward). Show what information you required and how you calculated his contribution maximum for 2013 – ie show all details needed to calculate RRSP contribution. What assumptions did you have to make? Do you need a Schedule 7? (Read S7 instructions)
o Capital Gains – must include a full description of a transaction that will lead to a taxable capital gain in addition to the other types of income, and include Schedule 3 fully completed.
o Charitable Contribution. Must include a charitable contribution and Schedule 9.
o Any other variables. Up to 10% bonus for a more complex case (maximum grade 100%).
Step2 Fully complete the relevant tax forms for the client to submit a complete return.Include all information and applicable credits. Submit all tax forms with your assignment.
Step 3Go to www.taxtips.ca and enter in your case study. Print off the case study and include with your assignment.The answers from Taxtips should verify your manual answers, and you should make every effort to reconcile the two correctly. If they do not agree, study them and find the source of your error.
Step 4 In a short cover letter to the client, briefly summarize the tax situation for the year (total income, total tax payable, balance owing or refund) and state how much tax was saved as a result of the RRSP contribution, and the charitable contribution.
We will be reviewing taxtips in class.Note – when entering capital gains in taxtips, you enter the capital gain, not the taxable capital gain that you enter on the T1 general.Taxtips automatically calculates the taxable capital gain. When entering dividends in taxtips, you enter the cash amount received, not the taxable amount you put on the T1 general. Taxable amounts for capital gains and dividends will appear in a column to the right, and should match your paper forms.
1 Case text is written in sentence form with proper spelling, grammar, and formatting. It flows logically and is clear. It contains all relevant information required to correctly complete the tax returns. Title page with date, course, name etc. 4
2 No entries in forms that are not explained by the case description. 4
3 Includes all required elements
ID 3 incomes Capital gains RRSP Charitable 2
4 All supporting forms are included and completed correctly eg statement of rental income for rental income, S3, S4, S9 for charitable contribution. 4
5 RRSP Limit
Correct information, calculation shown, assumptions stated 4
6 T1 page 1 complete 2
7 T1 page 2
Income entries correct and match case 4
8 T1 page 3
Deductions entered correctly and match case 2
9 Schedule 1
Complete and correct, all relevant credits included, plus any additional as noted in case. 4
10 ON 428
Complete and correct 2
11 T1 page 4
Complete and correct. Reasonable estimate of total income tax deducted is included and noted in case. 4
12 Tax tips
Year, Province ON, Correctly reconciled to match case and forms. 4
13 Summary letter to client is professional and includes correct information. 4
14 Overall effort, clarity, information presented in an organized and professional way. Text is typewritten. Forms neatly completed.Cover page, no report cover as requested. 4
15 No additional, incorrect entries or unnecessary forms. 2
Additional complexity and schedules included. 5
Mark (Maximum 50/50) /50