uulment-take&inprogress-false eBook Calculator Problem 3-41 (LO. 1, 3, 6, 7) Pai

Question

uulment-take&inprogress-false eBook Calculator Problem 3-41 (LO. 1, 3, 6, 7) Paig Click here to access the 2018 tax rate schedule. What are Paige's taxable income and tax liability? e, age 17, is a dependent of her parents. Paige earned $3,900 pet sitting and $4,100 in interest on a savings account. a. Paige's total taxable income is 3,750 b. Paige's tax liability is 70 x Feedback 7 Check My Work To reduce the tax savings that result from shifting income from parents to children, the net unearned income of certain were the parents' income. This provision, commonly referred to as the "kiddie tax," a full-time student) and has unearned income of more than $2,100. pplies to any child who is under age 19 (or under age 24

Explanation / Answer

Tax at Paige's rate

3,750 – (2,000) = 1,750 x 10% = 175 (Tax at Paiges rate)

Kiddie tax rate

(2550*10%)+((4100-2550)*24%) = 627

Total tax liability =175+627 = $802

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