Taxation Assignment

Assignment 1

Problem 9:

1)Economic Reality test

| CRA | Client: Harry Chow |

Control test | 1) Chow will call a qualified worker to go to work when there is a job there. 2) Who gets a job is decided by Chow. | 1) The worker can refuse the assignment. 2) The worker decides when to finish the work and how the work to be done. He or she doesn’t need to report to Chow’s work place. |

The ownership of tools test | 1) Chow provides the doors and the parts used in the repaid or installation. 2) Special racks and a special drill are available for all workers. | 1) The worker maintains their own truck and tools. 2) The worker is responsible for fixing any defects or paying for any replacements within warranty period. |

The profit/Loss test | | 1) All workers have a chance of making a profit. 2) All workers must cover their operating cost on their own. 3) All workers may have a loss from any defects or bad work performance. |

2)Integration test

| CRA | Harry Chow |

| | All workers are paid by the job. |

3)Specific Result test

CRA | Harry Chow |

| 1) The worker will not get paid until the door is successfully repaired or installed. |

In conclusion, based on three tests, a list of qualified installers and repair-persons will more likely be considered as independent contractors.

Problem 11

1) 3500 Employer contributions to RPP: “statutory exceptions”

800 (private health insurance service plan premiums: statutory exceptions)

450 (provincial health tax levies: “statutory exceptions”)

900 (included in Employment Income)

1800 (for company promotion not personal use: not included in EI)

6000 (EI)

2000 (do not include it in EI for now, will be taxed when it is received)

450 (they are used for...