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Question
In 2015, Juanita received a salary of $62,000 and earned commission income of $9,000. Of the $9,000 earned from commissions, only $7,500 was received in 2015 with the remaining $1,500 received in January 2016. She also received a car allowance of $0.55 per employment kilometre (km). Juanita is required to pay her own expenses relating to her sales duties. She has paid the following expenses in 2015, all of which are considered reasonable:
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Automobile operating costs (gas, repairs, insurance)
$7,200
Interest on loan to purchase a car
1,200
Advertising and promotion items
2,000
Entertainment meals and drinks
1,000
Parking
400
Cost of new home computer (30% employment use)
1,100
Home office costs:
Utilities – heat, water, electricity
4,800
Mortgage interest
6,000
Property taxes
3,000
Insurance
800
Juanita purchased a new car two years ago for $25,000. At the end of 2014, the undepreciated capital cost of the car was $19,000. In 2015, she drove the car 24,000 km of which 16,000 were for employment purposes.
Juanita used her home office exclusively for her employment and routinely net there with clients. Normally, she worked on day a week from the home office and the other days at her employer’s place of business or out of the office visiting customers. Her home office occupies 5% of the space in her home.
Required:
Determine Juanita’s net income from employment for the 2015 taxation year. (assume the automobile for salespersons option has NOT been chosen by the employer under ITA 6(2.1). List separately any other deductions Juanita may have that are not part of her employment income calculation.Calculate the automobile standby charge and operating benefit if Juanita’s employer supplied her with the car. (So, she would not get an allowance, nor does she pay anything toward the personal use of the car.)Assume Juanita is self-employed salesperson. She operates her business out of her house (using the same 5% space). She earned $71,000 during the year, however, $1,500 is still owed to her and will likely be received in January 2016. Complete the T2125 (or include the relevant information from it).
