Question

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? Use Tax Rate Schedule, Dividends and Capital Gains Tax Rates, Estates and Trusts for reference.

b. Carson is 23 years old at year-end. He is a full-time student and earned $14,300 from his summer internship and part-time job. He also received $5,850 of qualified dividend income. (Do not round intermediate calculations. Round your final answer to 1 decimal place.)

	Tax liability

Answer 1

b.)	Carson earnings	$14300
	Qualified dividend income	$5850
	Gross income	$20150
	(-) Standard deduction	$12200
	Taxable income	$7950
	Unearned Income	$5850
	(-)Statutory Deduction	$2200
	Net unearned Income subject to Kiddie Tax	$3650
	(Tax on Unearned Income per Kiddie Tax - Preferential rate) * 15% (3650 - 2650) * 15%	$150
	Taxable Income at Carson's ordinary Tax rate (7950 - 5850)	$2100
	Tax on Ordinary Income (2100*10%)	$210
	Tax Liability ($150+$210)	$360

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