Disbursements and withholdings

Reference no: EM13542200

Ms. Haddie comes to you for advice in February 2015. Last year, 2014 was a year of considerable change and turmoil for her. Her job in Waterloo, with Takeover Ltd., evaporated on March 31, 2014, as a result of a reorganization of the company's business after a merger with a competitor. She found another job in Dundas (an improvement), but it required her to move there. Her divorce from her former husband became final during 2013. Ms. Haddie, who was already a single parent of a nine-year-old daughter, decided to adopt a five-year-old child locally in May of 2014. By June 2014, after completing her move to her new job, the adoption was finalized. The court costs, legal cost, and administrative costs were $15,400.

Other information on receipts and benefits:
Salary earned in 2014 ($40,000 in Waterloo, $54,000 in Dundas) $94,000
Profit from sale of cosmetics at home parties held in spare time 4,850
Interest on Canada Savings Bonds 1,725
Spousal support pursuant to divorce agreement ($600 per month for her support and $450 per month for the support of her daughter, age 9) 12,600
Moving allowance 4,500

Disbursements and withholdings:
Employment Insurance premium withheld 914
Canada Pension Plan contributions withheld 2,426
Union dues 500
Monthly bus passes (12 months) to go to work and back 1,500
Net rental loss (for tax purposes) on investment property (4,800)
Registered retirement savings plan contributions, made on February 14, 2015 (2013 earned income was $118,569) 24,500
Registered education savings plan payments 2014 ($60 per month) 720
Tuition fees for 4 months part-time at a local University 650
Payment on cancellation of lease for Waterloo apartment 575
Security deposit on apartment in Dundas 475
Gasoline and direct car expenses incurred in move to Dundas (72 km) 20
Trailer rental for move to Dundas (including one-way drop-off fee of $75) 190
Cost of shipping remainder of household effects (including packing and unpacking fees of $1,500) 2,600
Cost of hotel ($125) and meals ($55) in Hamilton while awaiting delivery and unpacking of household effects (one day) 180
Payment to babysitter for care of both children after school (38 weeks @ $80 per week) and during school holidays (8 weeks @ $400 per week) 6,240
Summer camp for children (4 weeks @ $200 per week) $800 each
Hockey school for the two children $900 each

Required:
Calculate:
(A) the minimum income under Division B for Ms. Haddie in 2014;
(B) taxable income for 2014 and federal taxes payable for 2014.

Provide explanation for all items omitted and show all calculations whether or not necessary to the final answer. Also provide any tax advice on RRSP.

Reference no: EM13542200

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