Derek, a single taxpayer, has AGI of $55,000 which includes $5,000 of qualified dividends. Derek does not itemize deductions. What is his 2018 federal income tax?

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Quizplus · Accepted Answer

Derek's taxable income is $55,000 - $12,000 (standard deduction for 2018) = $43,000. The qualified dividends are taxed at 0% up to $38,600 (2018 threshold for single filers), and the remaining $4,400 is taxed at 15%. The rest of the income is taxed at ordinary rates. Calculating the tax results in $5,030.

Derek, a Single Taxpayer, Has AGI of $55,000 Which Includes