Question

F earned $120,000 of employment income in the current year. His employer withheld CPP and EI premiums of $4,057 as well as income tax. F’s marital status is single. What is F’s federal tax payable for the current year (2021)?

Answer 1

To calculate F's federal tax payable for the current year, subtract the CPP and EI premiums from his employment income, determine the taxable income, and apply the appropriate federal tax rates.

Step-by-step explanation:

To calculate F's federal tax payable for the current year, we need to determine his taxable income. From his employment income of $120,000, we subtract the CPP and EI premiums withheld, which amounts to $4,057. This leaves us with a taxable income of $115,943.

For a single individual, the federal tax rates for the 2021 tax year are as follows: 15% on the first $49,020 of taxable income, 20.5% on the portion between $49,020 and $98,040, and 26% on the portion above $98,040.

Let's calculate F's federal tax payable:

Adding up these amounts, F's federal tax payable for the current year is approximately $25,868.39.