Tarik,a single taxpayer,has AGI of $55,000 which includes $1,000 of qualified dividends.Tarik does not of itemize deductions.What is his 2019 federal income tax?
A)$5,425
B)$5,205
C)$7,889
D)None of the above

Question

Quizplus · Accepted Answer

To calculate Tarik's federal income tax, we need to follow these steps:
1. Calculate his taxable income:
AGI = $55,000
Standard deduction for a single taxpayer in 2019 = $12,200
Taxable income = AGI - standard deduction = $55,000 - $12,200 = $42,800
2. Determine his tax bracket:
Tarik's taxable income falls in the 22% tax bracket.
3. Calculate his income tax before credits:
Tax before credits = ($9,700 x 10%) + (($39,475 - $9,700) x 12%) + (($42,800 - $39,475) x 22%) = $4,710.25
4. Calculate his credits:
Tarik is eligible for the standard deduction ($12,200) and the credit for other dependents (if he has any dependents). Since he has no dependents, his total credits are $12,200.
5. Calculate his final tax liability:
Final tax liability = Tax before credits - credits + qualified dividends tax (which is taxed at long-term capital gains rates) = $4,710.25 - $12,200 + ($1,000 x 15%) = $5,205
Therefore, the answer is B.

Tarik,a Single Taxpayer,has AGI of $55,000 Which Includes $1,000 of Qualified