Question

Bock Calculator Problem 3-37 (Algorithek) (10.3.7) Taylor, age 15, is claimed as a dependent by her parents. For 2019, she has the following income $4.400 wages from a summer job, $1,820 interest from a money market account, and $2.100 interest from City of Boston bonds. If required, round your answers to the nearest dollar. If an amount is zero, enter "o". a. Taylor's standard deduction for 2019 is Taylor's taxable income for 2019 is X To reduce the tax savings that result from shifting income from parents to children, the net unearned Income (commonly called investment Income) of certain children is taxed using special rules. This provision, commonly referred to as the kiddie tax, applies to any child who is under age 19 (or under age 24 if a full-time student) b. Compute Taylor's "net unearned income for the purpose of the kiddie tax. X Click here to access the 2019 tax rate schedule. Compute Taylor's tax liability

Answer 1

Computation of Taylors Tax Liability for the year 2019

Income from salary :-

Wages from summer job     - $ 4,400

Standard Deduction ( Dependent on Parents)      - ( $ 1,100 )

Gross Salary Income - $ 3,300

Income From Other Sources :-

Interest From Market account - $ 1,820

Interest from City of Boston Bonds - $ 2,100

Gross Taxable Income - $ 7,220

Tax Calculation : -

Social Security Tax - $ 272.80

Medicare Tax - $ 63.80

Total Tax Liability - $ 336.60

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