For the "kiddie tax" rule to apply, the child must __________. -Have less than $2,200 in investment income. -Have enough earned income to pay over 50% of their own support. -Have at least one living parent. -Not have attained age 23 in the tax year.
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For the "kiddie tax" rule to apply, the child must __________.
-Have less than $2,200 in investment income.
-Have enough earned income to pay over 50% of their own support.
-Have at least one living parent.
-Not have attained age 23 in the tax year.
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- 2. LO 7.3 Calculate the amount of the child and dependent care credit allowed before any tax liability limitations or other credits for 2019 in each of the following cases, assuming the taxpayers had no income other than the stated amounts. 1. William and Carla file a joint tax return. Carla earned $27,500 during the year, while William attended law school full-time for 9 months and earned no income. They paid $3,500 for the care of their 3-year-old child, Carl. $ 2. Raymond and Michele file a joint tax return. Raymond earned $32,500 during the year, while Michele earned $9,000 for the year from a part-time job. They paid $7,000 for the care of their two children under age 13. $ 3. Beth is a single taxpayer who has two dependent children under age 5. Beth earned $25,500 in wages during the year and paid $6,700 for the care of her children.Ma1. 7- Taxpayer is 16 years old at the end of the tax year and is a qualifying (dependent) of her parents. For the tax year, Taxpayer gross income includes only $1,200 of interest on corporate bonds. Determine Taxpayer's income tax liability for the year assuming her parents' marginal ordinary income tax rate is 24%. Remember to work through the tax formula.T2. Which of these cases would be subject to the "kiddie tax"? Mina, age 12, earned $800 in dividends, with no other income. Jordan, age 15, worked as a lifeguard all summer and earned $2,800 with no other income. Bophy, age 14, earned $1,000 in interest and had a $1,800 royalty from a family oil well. She had no other income. Victor, age 19, is taking a year off before starting college. He received $4,200 in dividends with no other income
- Assume Karen is 12 years old and her only income is $5,500 of interest income from a bank account with money her parents have given her to save for college. If Karen 's parent's tax rate is 35%, and Karen's portion of income is taxed at 10%, what is Karen's income tax liability? a. $1,650 b. $1,265 c. $550 d. $1,925Drill - Net Unearned Income inette, age 16, has dividend income of $2,800 and interest income of $935. She has no investment expenses. Determine the net nearned income for the purpose of the kiddie tax. et unearned income is $17.A doctor pays his children $100,000 each year for "consulting services". The IRS plans to disallow that amount as a deduction on the doctor's business tax return (Form 1120). The children reported the income they received as wage income. However, the income is taxed at a relatively modest marginal income tax rate. Are there any steps that should be taken to protect the doctor and his children? a.Nothing at this time. Plan to vigorously contest the deduction disallowance. b.Extend the statute of limitations on assessment of the Form 1120, thus delaying any action on the children's tax returns. c.File Form 1040X on behalf of the children making a protective refund claim of the income tax the children paid. Also request a refund of any employment tax. d.File an amended Form 1120X protecting the parties and reallocating the payments to the children as a loan to the doctor/shareholder.
- Q.7. In 2020, Henry Jones (Social Security number 123-45-6789) works as a freelance driver, finding customers using various platforms like Uber and Grubhub. He is single and has no other sources of income. In 2020, Henry's qualified business income from driving is $116,200. Assume Henry takes the standard deduction of $12,400. Click here to access the 2020 individual tax rate schedule to use for this problem. Assume the QBI amount is net of the self-employment tax deduction. a. Compute Henry's QBI deduction and his tax liability for 2020. QBI deduction: $_____ Tax liability (round to the nearest dollar): $____which of the following is required for a taxpayer to be subject to the tax on unearned income of minors ( kiddie tax) in 2020? a) must have no earned income b) 21 years of age or younger c) both parents must be living d) net unearned income must exceed $2,200 e) all of the above are requiredIn connection with the application of the kiddie tax, comment on the following. A. The child has only earned income . B. The child has a modest amount of unearned income. C. The child is age 20, is not a student, and is not disabled. D. The child is married E. Effect of the parental election. F. The result when the parental election is made and the married parents file separate returns.
- 1. Review Later Your client is a 10 year old child with $5,600 worth of investment income. Which of the following is an option for this child's 2021 tax return? Pay tax at the same rate as for estates and trusts Pay tax at her parent's marginal tax rate Use the standard deduction to wipe out any tax on the $5,600 Either B or C1. A college-age taxpayer files their own return in TY2019 to reclaim withholdings. They are claimed as a dependent on their parents' TY2019 return, but will not be claimed on the future TY2020 return. What amount of "stimulus" will they receive and when will they receive it? Assume no dependents, single, and under $75,000 in AGI. a. $500 payment in calendar year 2020. b. $1,200 payment in calendar year 2020. c. $500 in credit on the future TY2020 return. d. $1,200 in credit on the TY2020 return.Qualifying Dependents (LO 1.6) In each of the following situations, determine whether the taxpayer(s) has/have a dependent and if so, the total amount of the child tax credit and other dependent credit for 2021 (assuming no advance payments or limitations apply). If an amount is zero, enter "0" a. Donna, a 20-year-old single taxpayer, supports her mother, who lives in her own home. Her mother has income of $1,350. b. William, age 43, and Mary, age 45, are married and support William's 19-year- old sister, who is not a student. The sister's income from a part-time job is $4,300, c. Devi was divorced in 2019 and receives child support of $250 per month from her ex-husband for the support of their 8-year-old son, John, who lives with her. Devi is 45 and provides more than half of her son's support. d. Wendell, an 89-year-old single taxpayer, supports his son, who is 67 years old, lives with him and earns no income. e. Wilma, age 65, and Morris, age 66, are married. They file a joint…
