Calculate tax liability, Taxation

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?

Posted Date: 3/14/2013 1:04:33 AM | Location : United States





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

 

$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

Posted by Expertsmind | Posted Date: 3/14/2013 1:04:55 AM


Related Discussions:- Calculate tax liability, Assignment Help, Ask Question on Calculate tax liability, Get Answer, Expert's Help, Calculate tax liability Discussions

Write discussion on Calculate tax liability
Your posts are moderated
Related Questions
T ax Shields A tax shield is defining any reduction in a corporation's tax bill which can be brought about by management. Depreciation, for example create a tax shield

I have 95 qustions and I need to get ur help for some of these qustions that I can not do it. the homwork will be avalble just for 2 hours on this Sanday

Avis''s taxable income for the year is $300,000 and Best''s taxable income for the year is $425,000. For each of the scenarios provided,

Required: ? Use the following information to complete Phillip and Claire Dunphy's 2012 federal income tax return. If information is missing, use reasonable assumptions to fil

what is the dis advantage of digressive tax?

Jenny is 35 years of age, single and is a professional hairdresser. She was born in Australia, however she often travels overseas for extended periods for work purposes. Jenny r

Explain the Negative List of Services applicable w.e.f 1,july,2012 ?

The use by a corporation of the losses it continued in earlier years to compensate taxes on the profits it attains in future years. Individuals can also utilize a tax umbrella so t

Your firm  purchased a line of computer equipment for $1.5M  four  years ago.  It is assigned a CCA rate of 20% and the firm has a tax rate of 35%.  At the end of this year (year 4