Question

[The following information applies to the questions displayed below.] In 2019, Carson is claimed as a...

[The following information applies to the questions displayed below.]

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.

2019 Tax Rate Schedules

Individuals

Schedule X-Single

If taxable income is over: But not over: The tax is:
$           0 $    9,700 10% of taxable income
$    9,700 $ 39,475 $970 plus 12% of the excess over $9,700
$ 39,475 $ 84,200 $4,543 plus 22% of the excess over $39,475
$ 84,200 $160,725 $14,382.50 plus 24% of the excess over $84,200
$160,725 $204,100 $32,748.50 plus 32% of the excess over $160,725
$204,100 $510,300 $46,628.50 plus 35% of the excess over $204,100
$510,300 $153,798.50 plus 37% of the excess over $510,300

Schedule Y-1-Married Filing Jointly or Qualifying Widow(er)

If taxable income is over: But not over: The tax is:
$           0 $ 19,400 10% of taxable income
$ 19,400 $ 78,950 $1,940 plus 12% of the excess over $19,400
$ 78,950 $168,400 $9,086 plus 22% of the excess over $78,950
$168,400 $321,450 $28,765 plus 24% of the excess over $168,400
$321,450 $408,200 $65,497 plus 32% of the excess over $321,450
$408,200 $612,350 $93,257 plus 35% of the excess over $408,200
$612,350 $164,709.50 plus 37% of the excess over $612,350

Schedule Z-Head of Household

If taxable income is over: But not over: The tax is:
$           0 $ 13,850 10% of taxable income
$ 13,850 $ 52,850 $1,385 plus 12% of the excess over $13,850
$ 52,850 $ 84,200 $6,065 plus 22% of the excess over $52,850
$ 84,200 $160,700 $12,962 plus 24% of the excess over $84,200
$160,700 $204,100 $31,322 plus 32% of the excess over $160,700
$204,100 $510,300 $45,210 plus 35% of the excess over $204,100
$510,300 $152,380 plus 37% of the excess over $510,300

Schedule Y-2-Married Filing Separately

If taxable income is over: But not over: The tax is:
$           0 $    9,700 10% of taxable income
$    9,700 $ 39,475 $970 plus 12% of the excess over $9,700
$ 39,475 $ 84,200 $4,543 plus 22% of the excess over $39,475
$ 84,200 $160,725 $14,382.50 plus 24% of the excess over $84,200
$160,725 $204,100 $32,748.50 plus 32% of the excess over $160,725
$204,100 $306,175 $46,628.50 plus 35% of the excess over $204,100
$306,175 $82,354.75 plus 37% of the excess over $306,175

Tax Rates for Net Capital Gains and Qualified Dividends

Rate* Taxable Income
Married Filing Jointly Married Filing Separately Single Head of Household Trusts and Estates
0% $0 - $78,750 $0 - $39,375 $0 - $39,375 $0 - $52,750 $0 - $2,650
15% $78,751 - $488,850 $39,376 - $244,425 $39,376 - $434,550 $52,751 - $461,700 $2,651 - $12,950
20% $488,851+ $244,426+ $434,551+ $461,701+ $12,951+

Estates and Trusts

If taxable income is over: But not over:   The tax is:
$ 0 $ 2,600   10% of taxable income
$ 2,600 $ 9,300   $260 plus 24% of the excess over $2,600
$ 9,300 $12,750   $1,868 plus 35% of the excess over $9,300
$12,750   $3,075.50 plus 37% of the excess over $12,750

*This rate applies to the net capital gains and qualified dividends that fall within the range of taxable income specified in the table (net capital gains and qualified dividends are included in taxable income last for this purpose).

b. Carson is 23 years old at year-end. He is a full-time student and earned $14,000 from his summer internship and part-time job. He also received $5,000 of qualified dividend income. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Tax liability:____________

Homework Answers

Answer #1
Particulars Amount in ( $ )

Income from summer internship and part- time job

14000
Add - Qualified dividend income 5000

Adjusted Gross Income

19000
Less - Standard Deduction ( as per federal income tax rules ) (12200)

Total Taxable Income

6800

Ordinary taxable income = Total Taxable Income - Qualified dividend income

= $6800 - $5000

= $1800.

Tax rate Taxable income Calculations Amount in ( $ )
10% $0 - $19400 $1800 * 10% 180
Carson's Tax liability 180

Kiddie tax:

Unearned income threshold is upto $2200

Income above $2200 = 5000 -2200 = 2800

Kiddie tax = ((2800 -2650) x 15%) = 22.50

Total tax liability = 180 +22.50 = 202.50

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