Determine the amount of tax liability in the following situations. In all cases,
ID: 2491324 • Letter: D
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.
a. Taxable income of $64,537 that includes qualified dividend income of $660.
Tax liability?
b. Taxable income of $17,653 that includes qualified dividend income of $361.
Tax liability?
c. Taxable income of $144,800 that includes qualified dividend income of $4,400.
Tax liability?
d. Taxable income of $44,698 that includes qualified dividend income of $1,276.
Tax liability?
e. Taxable income of $296,086 that includes qualified dividend income of $16,075.
Tax liability?
Explanation / Answer
It’s important to know dividends are considered either “qualified” or “nonqualified.” Qualified dividends are:
Nonqualified dividends are taxed at the same rates as ordinary income (currently a 39.6% maximum).
TABLE FOR TAX LIABILITIES:
Schedule Y-1 — Married filing Jointly or Qualifying Widow(er)
If taxable 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
a. Taxable income of $64,537 that includes qualified dividend income of $660.
Tax liability?
The taxable income of $64,537 that includes Qualified dividend income of $660
Taxable income = Total taxable income – Qualified dividend
= $64,537-$660
= $63877
Find Tax liabilities in table = $8,674
b. Taxable income of $17,653 that includes qualified dividend income of $361.
Tax liability?
The taxable income of $17,653 that includes Qualified dividend income of $361
Taxable income = Total taxable income – Qualified dividend
= $17,653-$361
= $ 17,292
Find Tax liabilities in table = $1,729
c. Taxable income of $144,800 that includes qualified dividend income of $4,400.
Tax liability?
The taxable income of $144,800 that includes Qualified dividend income of $4,400
Marginal rate is 25% is equals to 25%,So dividend income will be taxed at 15%
Taxable income = Total taxable income – Qualified dividend
= $144,800-$4,400
= $ 140,400
Find Tax liabilities in table = 26812 + 660(Dividend)
= $27,472
d. Taxable income of $44,698 that includes qualified dividend income of $1,276.
Tax liability?
The taxable income of $44,698 that includes Qualified dividend income of $1,276
Taxable income = Total taxable income – Qualified dividend
= $44,698-$1276
= $43422
Find Tax liabilities in table = $5,606
e. Taxable income of $296,086 that includes qualified dividend income of $16,075.
Tax liability?
The taxable income of $296,086 that includes Qualified dividend income of $16,075
Marginal rate is 33% is greater than 25%,So dividend income will be taxed at 15%
Taxable income = Total taxable income – Qualified dividend
= $296,086-$16,075
= $ 280,011
Find Tax liabilities in table = 46468.13+ 2411.25 (Dividend)
= $48879
If taxable 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
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