Determine the amount of after tax income

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Question - Determine the amount of after tax income an individual would have under each of the following independent scenarios. For simplicity, we will ignore any provincial income taxes. Show all calculations.

a) $1,000 in Interest Income from a Savings Account in a Non-Registered Account. The taxpayer's marginal tax bracket is 20.5%.

b) $1,000 in Eligible Dividends from a Canadian Company in a Non-Registered Account. The taxpayer's marginal tax bracket is 20.5%.

c) $1,000 in Ineligible Dividends from a Canadian Company in a Non-Registered Account. The taxpayer's marginal tax bracket is 20.5%.

d) $1,000 in Interest Income from Bonds inside a TFSA. The taxpayer's marginal tax bracket is 20.5%.

e) Provide an explanation for why the taxes owing by an individual on an eligible dividend are different from interest income.

Reference no: EM133057436

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