TAX PLANNING

The government provides public goods and services for

the community as a whole. To pay its bills, the government

needs revenue, or a source of income. The money that the

federal government uses to pay its bills comes mostly from

taxes. Taxes shift resources from private individuals and

businesses to the government.

INCOME TAX
Tax imposed on income
generated by individuals
from:
-employment
-business
-dividends
-rental
-pension
Income Tax Act (Section 4):
income is assessed based on the followings:
1. trading/business income
2. employment
3. dividends/interest received
4. rents/royalties
5. pensions/ other annuities
6. or any other types of income received
 Types of assessment
Joint/ Combined Assessment:
*A married woman can elect to have her total
income to be combined with her husband
*The assessment notice on the combined
income will be issued in the husband’s name.
 Types of assessment
Separate Assessment:
#All income of a married woman is
automatically assessed separately from that of
her husband’s.
#The wife however has to declare her income in
the tax return issued to her husband.
#A separate tax bill (notice of assessment) will
be issued to her in her own name.
SEPARATION/
DIVORCE CASES
The husband continues filing tax
return under his own tax reference
number.
He reports his own income in his tax
returns and is assessed on his income
only as an individual.
The wife reverts to her former tax
status prior to the marriage.
Her previous tax file is reopened (if
none, a new file will be registered for
her).
She files her own separate tax return
and report her own income including
alimony, if any.
 DECEASED INDIVIDUAL
The income of the individual for the particular
year up to the date of death will be assessed
separately.
The notice of assessment will be issued in the
name of the legal representative.
The income accrued in the particular year
after the date of death constitutes the income
of the estate of the deceased and is assessed
in the name of the executor or administrator
of the estate.
 exercise:
july 2017: Question 1 (B)