Question

(United States) In 2019, Carson is claimed as a dependent on his parents' tax return. Carson's parents provided most of his support.

What is Carson's tax liability for the year in each of the following alternative circumstances?

b. Carson is 23 years old at year-end. He is a full-time student and earned $15,800 from his summer internship and part-time job. He also received $5,700 of qualified dividend income.

Answer 1

Gross income/AGI (all unearnedincome) ($15,800 + $5,700)	$ 21,500.00
Standard deduction for dependent on another tax return (greater of $1,100 or the sum of $350 + $15800)  (not to exceed the regular standard deduction amount)	$ 12,200.00
Taxable income		$  9,300.00
Gross unearned income ($5,700- $2,200)		$  3,500.00
Net unearned income (lesser of 9300 and 3500)	3500
Kiddie Tax = 260 + 24% x (3500 -2400)	700
Taxable income taxed at Carson’s rate (12200 - 3500)	$   8,700.00
Preferential income taxed at Carson’s tax rates (5700-3500)	$   2,200.00
Tax on preferential income	$0
Taxable income tax at Carson’sordinary tax rates (8700 -2200)	$   6,500.00
Tax on ordinary income	$      653.00
Total tax = 700 + 0 + 653	$1,353.00