Calculate tax liability, Hello, I am zainab ali, i want help in Tax assignment.. , Taxation

Calculate tax liability, Taxation

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Hello,

I am zainab ali, i want help in Tax assignment..

In 2012 Joe, age 15, earned $2900 from acting and had $12,200 of interest income and $14,000 of taxable qualified dividend income. Joe’s parents claim an exemption for him on their own return. His parents’ MTR is 25%. What is Joe’s tax liability?

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Expertsmind 3/14/2013 12:57:56 AM Adjusted Gross Income: Earned Income: Income from Acting: $2900 Unearned Income: Interest Income: $12200 Taxable Qualified Dividend Income: $14000 $26200 Total Adjusted Gross Income $29100 Less: The Larger of: Standard Deduction $950 Or $300 plus earned income Earned income: Income from acting ($300 + $2900) $3200 $3200 Total Taxable Income $25900 Joe’s Tax Liability Joe’s Net Unearned Income Interest Income $12200 Taxable Qualified Dividend Income: $14000 Net Unearned Income: $26200 Unearned Income > $1900 $24300 Out of $ 24300 unearned Income Taxable Qualified Income is taxable @15% So, Tax on Taxable Qualified Dividend Income $1400015% = $2100 Tax on other Unearned Income taxable on parent’s taxed rates: Parent’s tax rate is 25% ($1030025%) = $2576 Tax on taxable Income minus Net Unearned Income Tax at child rate @ 10% ($25900-$24300)10% = $160 Total Tax Liability = $4836*

Expertsmind

3/14/2013 12:57:56 AM

Adjusted Gross Income:

Earned Income:

Income from Acting: $2900

Unearned Income:

Interest Income: $12200

Taxable Qualified Dividend Income: $14000

$26200

Total Adjusted Gross Income $29100

Less: The Larger of:

Standard Deduction $950

$300 plus earned income

Earned income: Income from acting

($300 + $2900) $3200 $3200

Total Taxable Income $25900

Joe’s Tax Liability

Joe’s Net Unearned Income

Interest Income $12200

Taxable Qualified Dividend Income: $14000

Net Unearned Income: $26200

Unearned Income > $1900 $24300

Out of $ 24300 unearned Income Taxable Qualified Income is taxable @15%

So, Tax on Taxable Qualified Dividend Income

$14000*15% = $2100

Tax on other Unearned Income taxable on parent’s taxed rates:

Parent’s tax rate is 25%

($10300*25%) = $2576

Tax on taxable Income minus Net Unearned Income

Tax at child rate @ 10%

($25900-$24300)*10% = $160

Total Tax Liability = $4836

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Calculate tax liability, Taxation

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