Planning 10 – Finances -The game of life – Taxes Notes

The guarantees of life – Taxes
What are Taxes:
 Tax is a __________________________________ levied on __________________________________
_______________________________ for the support of government for economic and
social operations. In other words, it is _____________________________________________
Who’s responsible for this:
 Canada uses _______________________________ for tax collection. That means that
_________________________________ is responsible for having their taxes paid
according to the Income Tax Act. It is up ___________________________ how much
_____________________________ and what ___________________________ you should be
Why is my pay check so low:
 Your employer _____________________________________ from your salary or wages.
 The most common ones are ______________________________________________________
Once you _________________________________________ you have to make _______
contributions based on your income.
_________________________________ are based on a percentage of your pay and may
change year to year.
Important Information:
 Everyone’s tax return ___________________________! Don’t assume that just
because your neighbour got a refund that you will get a refund.
 Know your benefits and where to look for extra benefits!
There are lots of places where you can ______________________________its that you
may not have thought of.
For example, if ______________________________________________ you can deduct certain
expenses from your net income thus saving you money!
You can deduct the ____________________________________________________ from your net
You can claim up _______________________________________________ for any physical
activity programs that you paid to register them in!
Step-by-Step Guide:
Step 1: On Page 1 of the form T1 General 2010 fill in the Identification
If you do not have a SIN (social insurance number) make one up for the sake of
this exercise.
Read all descriptions of boxes carefully. You don’t want to provide inaccurate
If you are under 19 and will not be turning 19 by April of that year you must
check NO for the GST/HST credit
 Step 2: On Page 2 of the T1 General 2010 form you will be calculating your
Total Income for that year.
In Box 101 – Enter the total amount of employment income. This is the sum of
all the amounts of Employment Income from any T4 slips that you received.
If you received any other sources of employment income (ie. Tips) you must
enter those in box 104
Be sure to go through each line and see if any areas apply to you (For example,
Interest and other investment income, or Universal Child Care Benefit, or SelfEmployment Income
Don’t mix CPP benefits or Employment Insurance benefits with the amounts
listed on your T4. You need to make sure the box numbers and descriptions all
 Step 3: On Page 2 of the T1 General 2010, add all of the amounts listed in the
right hand column for your Total Income. Enter this final amount in Box 150
at the bottom of the page. This is not your net income for the year.
 Step 4: Copy the amount from Box 150 on the BOTTOM of page 2 into Box
150 at the TOP of page 3. Page 3 is where we find deductions used to
calculate your Net Income for the year.
 Step 5: Go through lines 207 to 233 carefully to see if there are any benefits
that are applicable to you. There may not be any.
 Step 6: Subtract the total amount from line 233 from line 150. If you have
no deductions on line 235 then enter the same amount from line 233 in
line 236. This is your Net Income.
 Step 7: See if there are any other deductions that apply to you in the Taxable
Income section. If there are none, enter the amount from line 236 into line
260. This is your Taxable Income.
 Step 8: Remove Schedule 1 from the Forms 2010 booklet. This is used to
calculate your Federal Tax for the year.
 Step 9: You will first calculate the Tax Credits that you will receive for that
year. This is found in lines 300 to 378 (note: some numbers are skipped)
 Step 10: Everyone is given a basic federal amount of $10, 382. Enter this
amount on line 300. Go through the remaining lines and see if there are any
other tax credits that are owed to you.
Most people will find they have CPP Contributions (Line 308) and EI Premiums
(Line 312) that can be included. These amounts are found on your T4’s.
You can also claim the Canada Employment amount if you entered employment
income on line 101. Enter the lesser of $1,051 and the total employment income
from line 101 and 104 combined.
If you are unsure about whether or not you can claim a tax credit refer to the
General Income Tax and Benefit Guide.
 Step 11: Add up the amounts from line 300 to 332 and enter the result on
line 335. Multiply line 335 by 15% and enter this amount on line 338. If
you have no donations or gifts to declare, enter the same amount on line
350. This is your total federal tax credit.
 Step 12: Enter the taxable income amount from line 260 of the T! General
into the appropriate space (line 29) of Schedule 1.
 Step 13: Find the appropriate table for your taxable income and complete
the calculations to find the amount to enter into line 36. Enter this amount
on line 37 and if the following line (Federal tax on split income) does not
apply enter the same amount on line 39.
 Step 14: Enter the amount from line 28 onto line 40. If no other credits
(lines 41 – 43) apply then enter the same amount on line 44. Subtract Line
44 from Line 39 to calculate your Basic Federal Tax. If the amount on line
45 is negative then the basic federal tax is 0.
 Step 15: If the basic federal tax is zero, Enter 0 on lines 52 and 55 and
Schedule 1 is complete.
 Step 16: Enter the amount from line 55 of Schedule 1 into Line 420 on page 4
of the T1 General form. Add lines 420, 421, 430, 422, 428 and enter this in
line 435. This is your total payable amount.
 Step 17: In line 437 enter the sum of the Income Tax Deducted as listed in
box 22 of any T4 slips. Add lines 437 to 479 (Note: numbers missing) and
enter the total in line 482. This is the Total Tax Credit that you have.
 Step 18: Subtract Line 482 from line 435. If the total is negative you have a
tax refund. If it is positive you have a balance owing. If the amount is $2.00
or less no refund is paid out and no balance owing must be paid.
 Step 19: Sign and date in the appropriate box at the bottom of Page 4.