Question

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Problem 8-52 (LO 8-1)

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In 2019, Carson is claimed as a dependent on his parents' tax return. Carson's parents provided most of his support.

What is Carson's tax liability for the year in each of the following alternative circumstances? Use Tax Rate Schedule, Dividends and Capital Gains Tax Rates, Estates and Trusts for reference.

Problem 8-52 Part-b

b. Carson is 23 years old at year-end. He is a full-time student and earned $14,975 from his summer internship and part-time job. He also received $6,080 of qualified dividend income. (Do not round intermediate calculations. Round your final answer to 1 decimal place.)

What is his tax liability? (Please show complete steps, thank you!)
    

Answer 1

Answer

As of 2019, the dependent status no longer applies on taxes for an exemption amount. So, the individual must pay taxes on his taxable income.

First, let's determine the tax bracket for Carson. His total income taxable is 21,055 the sum of his income and the dividend income.

For 2019, this is the tax brackets that apply to Carson:

Tax Rate	Taxable Income(single)
10%	Up to $9,700
12%	$9,701 to $39,475

Now, let's apply this to his income for the year:

Income Amount for Tax Line	Tax Rate	Tax Due
9,700	0.1	970
11,355	0.12	1362.6
Total	-	2,332.6

Thus, he owes a total of $2,333.6