Question

Arene has earned income of $74 000 for the year. In addition, she has capital gain income of $6000 from the sale of some stock and $4500 of eligible dividend income that she received from another corporation in which she is a shareholder. Arene lives in Manitoba. Using the information provided in this chapter, calculate her tax payable for the year. Assume that Arene has no other tax deductions or tax credits for the year

Answer 1

The below table shows the tax bracket for the residents of Manitoba. Arene qualifies for the ones in bold.

Federal tax bracket	Federal tax rates	Manitoba tax bracket	Manitoba tax rates
$46,605 or less	15.00%	$31,843 or less	10.80%
$46,606 to $93,208	20.50%	$31,844 to $68,821	12.75%
$93,209 to $144,489	26.00%	More than $68,821	17.40%
$144,490 to $205,842	29.00%
More than $205,842	33.00%

Overall earning = $74,000 + $6,000 + $4500 = $84,500

Federal tax on $84,000 = (46,605*0.15)+(37,895*0.205) = $14,759.225

Manitoba tax on $84,000 = (31,843*0.108) + (36,978 * 0.1275) + (15,679*0.174) = $10,880.913

Total tax paid = Federal tax + Manitoba tax = $14,759.225 + $10,880.913 = $25,640.138