Question

I have the answer Lucy; Need Sheryl. In 2018, Sheryl is calmed as a dependent on her parent tax return. Sheryl did not provide more than half of her own support. What is Sheryl's tax liability for the year? She received $5,100 in interest income from corporate bonds she received several years ago. this is her only source of income. use tax rate schedule, dividend and capital gain tax rate, estate and trust

Answer 1

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Answer is highlighted in yellow: Solution: Sheryl has more than $2100 unearned income, kiddle tax rates will be applicable on her income Earned Income Interest Income (Unearned AGI Standard deduction Greater or 1050 or (earned income +350) Gross Unearned Income or Taxable Income Statutory Deduction subiec to ordinary rates Net Earned Income, subject to kiddle tax rates $ 5,100 $ 5,100 $ -1,050 $ 4,050 $ 1,050 (2100-1050) 3,000 $ 105 Tax on first 2100 at ordinary rate (2100-1050)*10% Tax on Income subjec to kiddle tax: first 2550 * 10% 2551 to 3000 @ 24% $ 255 3000-2550)*24% $ 108 S 468 Sheryl's tax liability (105+225+108)