Module 4: Complete a Basic Tax Return

Paul's return explained - Schedule 1, Federal tax

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Paul must now complete Schedule 1 to claim non-refundable tax credits and to calculate his net federal tax.

Paul enters his taxable income on line 1. He calculated his taxable income as $6,200 on page 3 of his return.

Now he enters the $6,200 in the appropriate column on line 2. In this case, he enters the amount on line 2 of the first column, since his taxable income is less than $35,595.

Following the instructions, Paul makes a calculation ($6,200 x 15% = $930) and enters the result on line 6 and again on line 8. He will use this amount, $930, to calculate his net federal tax on page 2 of Schedule 1.

Next he moves on to enter details for federal non-refundable tax credits. For more details about federal non-refundable tax credits see Line index 300-350 (Federal non-refundable tax credits). He completes line 300 to claim the basic personal amount of $8,648.

For more information, see Line 300 - Basic personal amount.

The next non-refundable tax credit that Paul can claim is on line 312, for EI premiums he paid last year. On line 312, he enters $120.90, the total amount from box 18 on the two T4s that he has.

For more details on completing line 312, see Line 312 - Employment Insurance premiums.

Paul does not qualify for any other federal non-refundable tax credits. So, he adds the amounts he entered on lines 300 and 312, and enters the amount on line 335 . He then follows the instructions to multiply the amount he entered on line 335 ($8,768.90) by 15% and enters the result on line 338. The result is $1,315.34 and he copies this amount to line 350, which determines his total federal non-refundable tax credit.

For more information, see Line 350 - Total federal non-refundable tax credits.

Paul must now complete the back of Schedule 1.

On the back of Schedule 1, Paul enters on line 9 the amount from line 8 on the front of Schedule 1. This amount, $930.00, is also entered on line 11.

Next, he copies the amount from line 350 on the front of Schedule 1 onto line 350 on the back.

Since there are no amounts to enter on lines 425, 426, and 427, there is nothing to add, and Paul enters the amount from line 350 on line 12.

He then subtracts the $1,315.34 from line 12 from the $930.00 on line 11. Since this results in a negative amount, Paul enters "0.00" on line 13.

This calculation determines that Paul's basic federal tax is zero.

There are more lines to consider on Schedule 1, but these do not apply to Paul. Therefore, he enters zero on line 19. This is his net federal tax. He will need to enter this amount on line 420 on page 4 of his return.

For more information, see Line 420 - Net federal tax.

Paul's return explained - Schedule 1, Federal tax

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