Question

Carson is 23 years old at year-end. He is a full-time student and earned $10,850 from his summer internship and part-time job. He also received $5,300 of qualified dividend income.In 2015, Carson is claimed as a dependent on his parent's tax return. His parents' ordinary income marginal tax rate is 28 percent. Carson's parents provided most of his support. Use Tax Rate Schedule for reference.

What is Carson's tax liability for the year in each of the following alternative circumstances?

Answer 1

Carson's tax liability for the year would be $585.

Step-by-step explanation:

The first step in calculating Carson's tax liability is to determine his taxable income. To do this, we need to subtract his standard deduction and exemption from his total income. In 2015, the standard deduction for a dependent is $6,300 and the exemption is $4,000. Therefore, Carson's taxable income is $10,850 (internship and part-time job income) + $5,300 (qualified dividend income) - $6,300 (standard deduction) - $4,000 (exemption) = $5,850.

Next, we need to determine Carson's tax bracket. Based on his taxable income, Carson falls into the 10% tax bracket for single taxpayers.

Finally, we can calculate Carson's tax liability by multiplying his taxable income by his tax bracket rate. In this case, Carson's tax liability would be $5,850 * 10% = $585.