Sheldon Daly is district sales manager for a Vancouver-based distribution company. He has requested that you help him es
Posted: Wed Mar 09, 2022 8:21 am
Sheldon Daly is district sales manager for a Vancouver-based
distribution company. He has requested that you help him establish
his employment income for tax purposes for the 2021 taxation year.
He has provided the following information for 2021:
Sheldon’s base salary is $103,800. As sales manager, he is entitled
to a small commission on the sales made by staff under his
supervision. He received $9,600 in such commissions, which included
$1,300 of commissions earned in late 2020. The December 2021
commissions were computed as $1,800 and were received in January
2022. The employer deducted the following from his salary in
2021:
Canada Pension Plan contributions $
3,166
Employment Insurance premiums
890
Private medical plan premiums
300
In addition to the above, the employer pays the following to
Sheldon or on his behalf:
Travel allowance $
3,200
Group term life insurance premiums for $50,000 coverage
900
Premiums for a private medical insurance plan
300
Sheldon’s spouse died in late 2020, leaving him to support three
children. In 2021, he hired a person at a cost of $9,000 to provide
babysitting services for the two youngest children. Following his
spouse’s death, Sheldon suffered from depression. As a result, his
employer paid the cost of $3,000 for counselling services and also
provided him with airline tickets costing $3,100 so that he and the
children could visit a relaxation resort in 2021.
Sheldon uses his own vehicle for employment duties. The vehicle
(class 10.1) had an undepreciated capital cost of $19,000 at the
end of 2020. Sheldon paid $5,300 in 2021 to operate the car and
used it 70% of the time for employment duties.
Sheldon incurred the following additional costs relating to his
employment:
Promotion (meals) $
1,100
Purchase of a cell phone
500
Basic cell phone plan
480
Lease costs for laptop computer
700
Home internet 800
Golf club dues 1,000
Hotel costs—out-of-town travel
5,700
Required:
Determine Sheldon’s employment income for tax purposes for
2021.
distribution company. He has requested that you help him establish
his employment income for tax purposes for the 2021 taxation year.
He has provided the following information for 2021:
Sheldon’s base salary is $103,800. As sales manager, he is entitled
to a small commission on the sales made by staff under his
supervision. He received $9,600 in such commissions, which included
$1,300 of commissions earned in late 2020. The December 2021
commissions were computed as $1,800 and were received in January
2022. The employer deducted the following from his salary in
2021:
Canada Pension Plan contributions $
3,166
Employment Insurance premiums
890
Private medical plan premiums
300
In addition to the above, the employer pays the following to
Sheldon or on his behalf:
Travel allowance $
3,200
Group term life insurance premiums for $50,000 coverage
900
Premiums for a private medical insurance plan
300
Sheldon’s spouse died in late 2020, leaving him to support three
children. In 2021, he hired a person at a cost of $9,000 to provide
babysitting services for the two youngest children. Following his
spouse’s death, Sheldon suffered from depression. As a result, his
employer paid the cost of $3,000 for counselling services and also
provided him with airline tickets costing $3,100 so that he and the
children could visit a relaxation resort in 2021.
Sheldon uses his own vehicle for employment duties. The vehicle
(class 10.1) had an undepreciated capital cost of $19,000 at the
end of 2020. Sheldon paid $5,300 in 2021 to operate the car and
used it 70% of the time for employment duties.
Sheldon incurred the following additional costs relating to his
employment:
Promotion (meals) $
1,100
Purchase of a cell phone
500
Basic cell phone plan
480
Lease costs for laptop computer
700
Home internet 800
Golf club dues 1,000
Hotel costs—out-of-town travel
5,700
Required:
Determine Sheldon’s employment income for tax purposes for
2021.