Question

In 2018, Simon, age 12, has interest income of $8,960 and no earned income. He has no investment expenses.

If required, round the tax liability to the nearest dollar.

1.Net unearned income is $_____

2. Simon's total tax is______

Answer 1

1	Net unearned Income	=	$       6,860
2	Simon's total tax	=	$       1,142
	Workings:
1	Net unearned Income	=	Net unearned Income - Threshold for 2018
		=	$8960 - $2100
		=	$       6,860
2	Simon's total tax	=	($3600 X 10%) + [($6860 - $3600) X 24%]
		=	($3600 X 10%) + ($3260 X 24%)
		=	$       1,142