Final answer:
Andre's unearned income over the $2,200 'kiddie tax' threshold would be taxed at the marginal tax rate of 10%. His earned income from mowing lawns would also likely be taxed starting at the 10% federal income tax rate, depending on his filing status.
Step-by-step explanation:
The question asks at what marginal tax rate is Andre's $8,000 of income taxed, given the 2020 'kiddie tax' threshold of $2,200. Andre's $5,000 from mowing lawns is considered earned income and would be taxed at ordinary income tax rates. The additional $3,000 he received as interest from a corporate bond is unearned income. With the 'kiddie tax', unearned income over the threshold of $2,200 for a child under 19 or a student under 24 is taxed at the estate and trust rates or the parent's marginal tax rate if it is higher.
For 2020, the tax brackets for estates and trusts were 10% for income up to $2,600, 24% for amounts over $2,600 and up to $9,450, and higher rates for amounts above that. Since Andre's $3,000 of unearned income minus the $2,200 threshold leaves $800 to be taxed, and this is below $2,600, the $800 would be taxed at the 10% rate. His earned income would be taxed at whatever rate applies to his income level and filing status, likely starting at the 10% federal income tax rate given his low level of income.