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?

Carson is 23 years old at year-end. He is a full-time student and earned $14,225 from his summer internship and part-time job. He also received $6,000 of qualified dividend income.

Answer 1

The tax laibility as calculated is $1298.5

Explanation:

a.) Carson earnings $14225

Less: the Standard deduction $6000

Taxable income $2225

Tax liability $222.5

b.) Carson earnings $14225

Qualified dividend income $5000

Gross income $19225

less: Standard deduction $12000

Taxable income $7225

Taxable income taxed at carson rate $1000

($7000 minus $6000)  

Ordinary Tax $222.5

Kiddie Tax is calculated as follows:  

Gross unearned income  

unearned income $6000

Kiddie tax up to 2600 $260

Kiddie tax for over and above 2600 $816

$1076

Total tax liability ($222.5 plus $1076) $1298.5