Question

Angelena files as a head of household. In 2018, she reported $52,300 of taxable income, including a $10,000 qualified dividend. What is her gross tax liability, rounded to the nearest whole dollar amount

Answer 1

Her gross tax liability is $4,882

Step-by-step explanation:

According to given data out of $52,300 , $10,000 is qualified dividend so remaining $42,300 will be taxed at normal rate.

Therefore, tax on ordinary income = $1,360 + ($42,300-$13,700)*12% =

tax on ordinary income =$4,792

In qualified dividend is taxed at 0% if income upto $51,700.

Hence excess $52,300-$51,700) will be taxed at 15%

Hence tax on dividend = $600*15% = $90

Hence total tax = $4,792+$90 = $4,882

Her gross tax liability is $4,882