In 2018, Richard, a single taxpayer, has adjusted gross income of $40,200. His AGI includes $4,000 of qualified dividends. Richard does not itemize deductions. What is his 2018 federal income tax?

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Quizplus · Accepted Answer

Richard's taxable income is $40,200 - $12,000 (standard deduction for single filers in 2018) = $28,200. The qualified dividends are taxed at 0% up to $38,600 for single filers, so they are not taxed. The remaining $24,200 is taxed at the 2018 tax rates: 10% on the first $9,525 and 12% on the remaining $14,675, resulting in a total tax of $2,714.

In 2018, Richard, a Single Taxpayer, Has Adjusted Gross Income