Question

Determine the amount of tax liability in the following situations. In all cases, the taxpayer is using the filing status of married filing jointly. Use the appropriate Tax Tables or Tax Rate Schedules.

1. Taxable income of $63,493 that includes a qualified dividend of $960.
2. Taxable income of $22,279 that includes a qualified dividend of $363.
3. Taxable income of $151,900 that includes a qualified dividend of $4,510. (Round your intermediate computations to 2 decimal places and final answer to the nearest whole dollar amount.)
4. Taxable income of $52,902 that includes a qualified dividend of $1,203.
5. Taxable income of $307,753 that includes a qualified dividend of $18,717. (Round your intermediate computations to 2 decimal places and final answer to the nearest whole dollar amount.)

(For all requirements, use the Tax Tables for taxpayers with taxable income under $100,000 and the Tax Rate Schedules for those with taxable income above $100,000.)

Answer 1

It's important to know dividends are considered either "qualified" or "nonqualified". Qualified dividends are:

• Tax-free for those with income falling within the 10% and 15% brackets to the extent qualified dividend income remains within those brackets.
• Taxed at a 15% rate for those with income falling with in the 25% to 39.6% tax brackets.
• Taxed at a 20% rate for higher income taxpayers whose income surpasses the 39.6% tax bracket.

Nonqualified dividends are taxed at the same rates as ordinary income(currently at 39.6% maximum).

TABLE FOR TAX LIABILITIES:

Schedule Y-1 --- Married filing jointly or Qualifying Widow(er)

If taxabale income is over--	But not over--	The tax is:	of the amount over--
$0	$18,150	10%	$0
$18,150	$73,800	$1,815,00+15%	$18,150
$73,800	$148,850	$10,162.50+25%	$73,800
$148,850	$226,850	$28,925.00+28%	$148,850
$226,850	$405,100	$50,765.00+33%	$226,850
$405,100	$457,600	$109,587.50+35%	$405,100
$457,600	no limit	$127,962.50+39.6%	$457,600

Taxable income of $63,493 that includes qualified dividend income of $960. Tax liabilty?

The taxable income of $63,493 that includes Qualified dividend income of $960

Taxable income=Total taxable income -Qualified dividend

=$63,493-$960

=62,533

Find tax liabilities in table=$8,674.

Taxable income of $22,279 that includes qualified dividend income of $363.

Taxable income=Total taxable income-Qualified divendend

=$22,279-$363

=$21,916

Find tax liabilities= $2,191.

Taxable income $151,900 that includes qualified dividend income of $4,510. tax liability?

The taxable income of $151,900 that includes Qualified dividend income of $4,510.

marginal rate is 25% is equals to 25%,so dividend income will be taxed at 15%

Taxable income= Total taxable income-Qualified dividend

=$151,900-$4,510

=$147,390

Find tax liabilities in the table = 26182+660(Dividend)

=$27,472

The taxable income of $52,902 that includes Qualified dividend income of $1,203.

Taxable income=Total taxable income-Qualified dividend

=$52,902-$1,203

=$51,699.

Find tax liabilities in table=$5,606.

The taxable income of $307,753 that includes Qualified dividend income of $18,717.

Marginal rate is 33% is greater than 25%,so dividend income will be taxed at 15%

Taxable income= Total taxable income- Qualified dividend

=$307,753-$18,717

=289,036

Find Tax liabilities in table= 46468.13+2411.25(Dividend)

=$48,879.