Brian and Kim have a 12-year-old child, Stan. For 2018, Brian and Kim have taxable income of $52,000, and Stan has interest income of $4,500.Click here to access the income tax rate schedules.If Stan’s parents elected to report Stan’s income on his parents’ return, what would the tax on Stan’s income be?$

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Asked Dec 4, 2019
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Brian and Kim have a 12-year-old child, Stan. For 2018, Brian and Kim have taxable income of $52,000, and Stan has interest income of $4,500.

Click here to access the income tax rate schedules.

If Stan’s parents elected to report Stan’s income on his parents’ return, what would the tax on Stan’s income be?
$

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Expert Answer

Step 1

Taxable Income:

Taxable income refers to the base upon which an income tax system imposes tax. Generally, it include some or all items of income and is reduced by expenses and other deductions.

Step 2

Calculation of tax on S’s I...

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Given, Taxable income = $52,000 Interest income = $4,500 S's has more than $2,100 unearned income, Kiddle tax rate will be applicable on her income. Earned Income Interest income (unearned) $4,500 $4,500 ($1050) $3,450 ($1050) $2400 AGI Standard deduction (Greater or $1050 or (earned income + 350) a. Taxable Income Statutory Deduction- subject to ordinary rates (2100 - 1050) b. Net Earned Income, subject to kiddle tax rates c. S's Earned Income (No earned income) d. S's Tax for 2018 (working note: 1) ($105 + $240) $345 Working Note: 1 S's Tax for 2018 Tax on first $2100 at ordinary rate (2100-1050) ×10% =$105 Tax on Income subject to kiddle tax : first $2,550×10% = $240

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