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In 2020, Simon, age 12, has interest income of $7,500 on funds he inherited from his grandmother, and no earned income. He has no investment expenses. His parents have a taxable income of $82,250 and file a joint return. Assume that no parental election is made. If required, round the tax computations to the nearest dollar.
Simon's net unearned income is $.
Simon's allocable parental tax is $.
Simon's total tax is $.

Sagot :

Parrainidn

Answer:

  • Simon's net unearned income is $5,300.
  • Simon's allocable parental tax is $1,166.
  • Simon's total tax is $1,276.

Explanation:

Simon net unearned income = Earned income - Standard deduction - Statutory deduction

= 7,500 - 1,100 - 1,100

= $5,300

Parents filling together with a gross income of $82,250 will fall under the 22% tax bracket.

Simon allocable parental tax = 5,300 * 22%

= $1,166

At kiddie tax rates, maximum unearned income to be taxed is $2,200.

Simon falls under 10% range in 2020.

Tax = (2,200 - $1,100 deduction) * 10%

= $110

Simon total tax = Allocable parental tax + tax on unearned income

= 1,166 + 110

= $1,276

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