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Please help me compute the net unearned income for Olivia.

Larry and Emily are a married couple who file jointly. They have three dependent children who are full-time students in 2018 Larry and Emily provided $11,500 of support for each child. Information for each child is as follows: EB (Click the icon to view the information.) Read the requirement. Compute Olivias tax, assuming the interest income is taxable Begin by computing the taxable income for Olivia. Wages Interest income Adjusted gross income Minus 3,300 2,700 6,000 Standard deduction (3,650 2,350 Taxable income Now compute the net unearned income for Olivia MinusLarry and Emily are a married couple who file jointly. They have three dependent children who are full-time students in 2018 Larry and Emily provided $11,500 of support for each child. Information for each child is as follows: EB (Click the icon to view the information.) Read the requirement. Wages Interest income Adjusted gross income Minus 3,300 2,700 6,000 Standard deduction 3,650) 2,350 Taxable income Now compute the net unearned income for Olivia. Minus Net uneaned incomeReference STANDARD DEDUCTION Filing Status Married individuals filing joint returns and surviving spouses Heads of households Unmarried individuals (other than surviving spouses and heads of households) Married individuals filing separate returns Additional standard deduction for the aged and the blind $ 24,000 18,000 12,000 12,000 1,300* Individual who is married and surviving spouses Individual who is unmarried and not a surviving spouse ,600 Taxpayer claimed as dependent on another taxpayers return: Greater of (1) earned income plus $350 or (2) $1,050 *These amounts are $2,600 and $3,200, respectively, for a taxpayer who is both aged and blind.i Reference Single If taxable income is: The tax is: 10% of taxable income. $952.50 + 12% of the excess over $9,525. Not over $9,525 Over $9,525 but not over $38,700 Over $38,700 but not over $82,500. . . . . $4,453.50 + 22% of the excess over $38,700. Over $82,500 but not over $157,500 . . . . $14,089.50 + 24% of the excess over $82,500. Over $157,500 but not over S200.000 . . . $32,089.50 + 32% of the excess over $157,500. Over $200,000 but not over $500,000. . . $45,689.50 + 35% of the excess over $200,000. Over $500,000 $150,689.50 + 37% of the excess over $500,000.Reference Childs tax rate brackets: 10% tax rate: Portion of taxable income not over ETI plus S2.550 24% tax rate: Portion of taxable income over ETI plus $2,550 but not over ETI plus $9,150 35% tax rate: Portion of taxable come over ETI plus $9,150 but not over ETI plus $12,500 37% tax rate: Portion of taxable income over ETI plus $12,500

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Answer #1

Compute the net unearned income for Olivia

Unearned income

$2700

Minus:

Standard deduction

(1050)

Statutory deduction

(1050)

Net unearned income

$600

Taxable income = 2350

Less: NUI = 600

ETI = 1750

Tax liability = 10% on lesser of 2350 or (1750+2550)

Therefore tax liability = 10% * 2350 = 235

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