Question

ron and madeleine couple received their 2023 form 1099-div (dividends received) in the amount of $1,450. ron and madeleine are in the 27% bracket.what would be their tax liability on the dividends received?

Answer 1

Ron and Madeleine's tax liability on the dividends received would amount to $391.50.

Step-by-step explanation:

Ron and Madeleine received $1,450 in dividends as reported on their 2023 Form 1099-DIV. To calculate their tax liability on this amount, we need to consider their tax bracket, which is 27%. The tax on dividends is calculated based on this bracket. The tax on dividends for individuals in this bracket is 27% of the total dividend income.

Therefore, the calculation is straightforward: $1,450 multiplied by 27% (or 0.27). This calculation yields $391.50, which represents Ron and Madeleine's tax liability on the dividends they received.

In summary, the tax liability for Ron and Madeleine on the $1,450 dividends received in 2023 amounts to $391.50. This calculation is based on their tax bracket of 27%. It's essential to understand how tax brackets work to determine the accurate tax amount owed on different types of income, such as dividends. This liability contributes to their overall tax obligation for the year and should be reported accurately in their tax filings to ensure compliance with tax regulations.

Answer 2

The $1,995.72 tax burden that Ron and Madeleine have on dividends is the result of applying the 10% and 27% tax brackets from 2023 to their taxable income.

Ron and Madeleine's tax liability of $1,995.72 is meticulously determined based on a comprehensive process involving their taxable income, dividends received, and the applicable tax brackets for the year 2023.

The first step involves calculating their taxable income, considering the $1,450 in dividends. With a standard deduction of $4,000 and a personal exemption of $67, their taxable income is derived at $5,383.

Next, referring to the tax brackets for 2023, the income is segmented: the initial $19,050 falls within the 10% tax bracket, the subsequent $58,350 enters the 12% tax bracket, and any remaining amount up to their taxable income is taxed at 27%.

To calculate the tax liability on dividends, the following steps are taken:

1. The first $19,050 is taxed at 10%, resulting in a tax of $1,905.

2. The remaining $336 ($5,383 - $19,050) is taxed at 27%, yielding a tax of $90.72.

Combining these components, the total tax liability on dividends amounts to $1,995.72.