Question

franklin's total income is $98,000. he has deductions available for rrsp ($8,000) and childcare ($6,000). he also has a refundable tax credit of $1,500. using the federal tax rates below, how much of franklin's taxable income is taxed at his federal marginal tax rate (mtr)? level of taxable income federal tax rate first $43,561 15% over $43,561 to $87,123 22% over $87,123 to $135,054 26% over $135,054 29%

Answer 1

To calculate the amount of Franklin's taxable income that is taxed at his federal marginal tax rate, we first subtract his deductions from his total income to get his taxable income. Then, we use the federal tax rates to determine the amount taxed at the marginal rate. The total tax at the marginal rate is $14,821.33.

Step-by-step explanation:

To determine how much of Franklin's taxable income is taxed at his federal marginal tax rate (MTR), we need to calculate his taxable income first.

Franklin's total income is $98,000. Deducting his RRSP contribution of $8,000 and childcare deduction of $6,000, we get a taxable income of $98,000 - $8,000 - $6,000 = $84,000.

We can then use the federal tax rates to calculate how much of Franklin's taxable income is taxed at his MTR:

• $43,561 × 15% = $6,534.15
• ($84,000 - $43,561) × 22% = $8,287.18
• The total tax at the MTR is $6,534.15 + $8,287.18 = $14,821.33

Therefore, $14,821.33 of Franklin's taxable income is taxed at his federal marginal tax rate.