In 2022

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

In 2022, 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? (Use Tax Rate Schedule, Dividends and Capital Gains Tax Rates for reference)

Required:

  1. Carson is 23 years old at year-end. He is a full-time student and earned $14,000 from his summer internship and part-time job. He also received $5,000 of qualified dividend income.
Tax Rates for Net Capital Gains and Qualified Dividends
Married Filing Jointly
$0-$83,350
Rate*
Trusts and Estates
Single
$0-$41,675
0%
$0-$2,800
$2,801 - $13,700
15%
$41,676 - $459,750
$459,751+
$517,201+
$13,701+
20%
*This rate applies to the net capital gains and qualified dividends that fall within the range of taxable income specified in the table (net capital gains and qualified di
$83,351 $517,200
Married Filing Separately
SO - $41,675
Taxable Income
$41,676-$258,600
$258,601+
Head of Household
$0-$55,800
$55,801 - $488,500
$488,501+
Transcribed Image Text:Tax Rates for Net Capital Gains and Qualified Dividends Married Filing Jointly $0-$83,350 Rate* Trusts and Estates Single $0-$41,675 0% $0-$2,800 $2,801 - $13,700 15% $41,676 - $459,750 $459,751+ $517,201+ $13,701+ 20% *This rate applies to the net capital gains and qualified dividends that fall within the range of taxable income specified in the table (net capital gains and qualified di $83,351 $517,200 Married Filing Separately SO - $41,675 Taxable Income $41,676-$258,600 $258,601+ Head of Household $0-$55,800 $55,801 - $488,500 $488,501+
2022 Tax Rate Schedules
Individuals
Schedule X-Single
If taxable income is over: But not over:
S
0
$ 10,275
$ 41,775
$ 89,075
$ 170,050
$215,950
$ 539,900
$ 0
$ 20,550
$ 83,550
$ 178,150
$ 340,100
$ 431,900
$ 647,850
Schedule Y-1-Married Filing Jointly or Qualifying Widow(er)
If taxable income is over: But not over:
S 0
$ 14,650
$ 55,900
$ 89,050
$ 170,050
$ 215,950
$ 539,900
$ 10,275
$ 41,775
$ 89,075
$ 170,050
$215,950
$539,900
Schedule Z-Head of Household
If taxable income is over: But not over:
-
$ 0
$ 10,275
$ 41,775
$ 89,075
$ 170,050
$ 215.950
$ 20,550
$ 83,550
$ 178,150
$340,100
$431,900
$ 647,850
$ 14,650
$ 55,900
$ 89,050
$ 170,050
$215,950
$539,900
The tax is:
10% of taxable income
$1,027.50 plus 12% of the excess over $10,275
$4,807.50 plus 22% of the excess over $41,775
$15,213.50 plus 24% of the excess over $89,075
$34,647.50 plus 32% of the excess over $170,050
$49,335.50 plus 35% of the excess over $215,950
$162,718 plus 37% of the excess over $539,900
Schedule Y-2-Married Filing Separately
If taxable income is over: But not over:
The tax is:
10% of taxable income
$2,055 plus 12% of the excess over $20,550
$9,615 plus 22% of the excess over $83,550
$30,427 plus 24% of the excess over $178,150
$69,295 plus 32% of the excess over $340,100
$98,671 plus 35% of the excess over $431,900
$174,253.50 plus 37% of the excess over $647,850
The tax is:
10% of taxable income
$1,465 plus 12% of the excess over $14,650
$6,415 plus 22% of the excess over $55,900
$13,708 plus 24% of the excess over $89,050
$33,148 plus 32% of the excess over $170,050
$47,836 plus 35% of the excess over $215,950
$161,218.50 plus 37% of the excess over $539,900
The tax is:
10% of taxable income
$ 10,275
$ 41,775
$ 89,075
$ 170,050
$215,950
$1,027.50 plus 12% of the excess over $10,275
$4,807.50 plus 22% of the excess over $41,775
$15,213.50 plus 24% of the excess over $89,075
$34,647.50 plus 32% of the excess over $170,050
$ 323.925 $49.335.50 plus 35% of the excess over $215.950
Transcribed Image Text:2022 Tax Rate Schedules Individuals Schedule X-Single If taxable income is over: But not over: S 0 $ 10,275 $ 41,775 $ 89,075 $ 170,050 $215,950 $ 539,900 $ 0 $ 20,550 $ 83,550 $ 178,150 $ 340,100 $ 431,900 $ 647,850 Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) If taxable income is over: But not over: S 0 $ 14,650 $ 55,900 $ 89,050 $ 170,050 $ 215,950 $ 539,900 $ 10,275 $ 41,775 $ 89,075 $ 170,050 $215,950 $539,900 Schedule Z-Head of Household If taxable income is over: But not over: - $ 0 $ 10,275 $ 41,775 $ 89,075 $ 170,050 $ 215.950 $ 20,550 $ 83,550 $ 178,150 $340,100 $431,900 $ 647,850 $ 14,650 $ 55,900 $ 89,050 $ 170,050 $215,950 $539,900 The tax is: 10% of taxable income $1,027.50 plus 12% of the excess over $10,275 $4,807.50 plus 22% of the excess over $41,775 $15,213.50 plus 24% of the excess over $89,075 $34,647.50 plus 32% of the excess over $170,050 $49,335.50 plus 35% of the excess over $215,950 $162,718 plus 37% of the excess over $539,900 Schedule Y-2-Married Filing Separately If taxable income is over: But not over: The tax is: 10% of taxable income $2,055 plus 12% of the excess over $20,550 $9,615 plus 22% of the excess over $83,550 $30,427 plus 24% of the excess over $178,150 $69,295 plus 32% of the excess over $340,100 $98,671 plus 35% of the excess over $431,900 $174,253.50 plus 37% of the excess over $647,850 The tax is: 10% of taxable income $1,465 plus 12% of the excess over $14,650 $6,415 plus 22% of the excess over $55,900 $13,708 plus 24% of the excess over $89,050 $33,148 plus 32% of the excess over $170,050 $47,836 plus 35% of the excess over $215,950 $161,218.50 plus 37% of the excess over $539,900 The tax is: 10% of taxable income $ 10,275 $ 41,775 $ 89,075 $ 170,050 $215,950 $1,027.50 plus 12% of the excess over $10,275 $4,807.50 plus 22% of the excess over $41,775 $15,213.50 plus 24% of the excess over $89,075 $34,647.50 plus 32% of the excess over $170,050 $ 323.925 $49.335.50 plus 35% of the excess over $215.950
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Capital Gains and Losses
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education