2019 tax payable

Question

Max finished his PhD and graduated from university in December 2018. He entered the workforce on January 1, 2019 with a gross salary of $85,000 plus an immediate $5,000 signing bonus when he started with his new employer, XYZ Inc. As a resident of Quebec, calculate his combined 2019 taxes payable. ( Ignore Non-Refundable Tax Credits, Quebec Abatement and any employer withholdings)  

Marginal tax rate for $90,000 is 41.12% and for $85,000 is 37.12%.

Shouldn't I just do this? $90,000 x 41.12% = $37008

But the answer I got isn't in the muiltiple choices. the nearest to the above is $31,291.

Answer 1

Taxable income depends on your tax bracket. Taxable income is gross income less allowable deductions and exemptions.

The federal tax deduction on $85,000 =$10,189

Provincial tax deduction = $12,287

QPP deductions = $2991

EI deduction = $860

QPIP =$402

Total tax = $26730

You need to calculate the tax your employer pays and add to total tax.

If your taxable income was $85,000 for 2019 marginal tax rate = 37.58%

It means your additional income – bonus will be taxed 37.58%. A $100 increase will be taxed $37.58. $5000 bonus will generate extra $3,121. That is 5000 * 624 = $3120 of net revenues.

Add total tax + marginal tax rate of $5000(($3120)