In 2020, Carson is claimed as a dependent on his parents' tax return. His parents report taxable income of $200,000 (married filing jointly). Carson's parents provided most of his support. What is Carson's tax liability for the year in each of the following alternative circumstances?
b. Carson is 23 years old at year-end. He is a full-time student and earned $14,300 from his summer internship and part-time job. He also received $5,300 of qualified dividend income. (Do not round intermediate calculations. Round your final answer to 1 decimal place.)
Please show how you got your answer.
Homework Answers
A dependent whoes Earned Income is more than $12200 & his unearned Income is more than $1100 is required to file his tax returns even if he is claimed as a dependent by his parents.
In the given case both the above conditions are fulfilled hence he is required to file his individual tax returns.
Salary From Internship & part time job (Earned Income) $14300
Qualified Dividend Income (Unearned Income) $ 5300
Gross Income $ 19600
Less :- Standard Deduction (Since single filer) $12400
TOTAL TAXABLE INCOME $ 7200
Calculation of Tax Liability:-
Total Taxable Income (as above) $7200
Less:-- Qualified Dividend (to be treated seperately) $5300
$ 1900
Tax on the above income of $1900 @10% $ 190
Tax on Qualified Dividend NIL*
TOTAL TAX PAYABLE $ 190
* Note:- Qualified Dividend is not taxable / or taxed at 0% since his income is $40000 or less.
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