Reference no: EM132768639

Question - Diego Garcia is 32 years old. Diego earned $112,000 in 2020 while employed as a financial analyst. The combined CPP and EI deduction during 2020 totaled $3,754. Of this amount, $166 was the CPP enhanced contribution. The following information was also provided pertaining to the 2020 taxation year:

a) Diego enrolled in part-time studies at the local university, paying tuition fees of $1,500.

b) Diego donated $2,000 to a registered charity for tax purposes, and $800 to a federal political party.

c) During the year, a total of $4,500 was spent on eyeglasses, dental care, and prescriptions, and none of this amount was reimbursed.

d) Diego's spouse did not work during 2020 while attending full-time post-secondary classes which cost $8,000 in tuition. The maximum allowed amount was transferred to Diego for 2020 tax purposes. Diego's spouse had no other income during the year.

e) Diego ha a $2,000 non-capital loss from 2019.

f) The couple does not have any children.

Required -

A. Calculate Diego's taxable income for 2020.

B. Calculate Diego's federal tax liability for 2020.