Velma is 16.Her income consists of municipal bond interest of $400 and interest credited to her savings account of $2,340.If her parent's taxable income is $88,000,what is Velma's 2016 tax liability?

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Quizplus · Accepted Answer

Velma's total income for tax purposes is $2,740 ($400 + $2,340). Since she is a dependent of her parents, her standard deduction is $1,050 and her taxable income is $1,690. Using the tax brackets for a dependent individual, her tax liability is $165.

Velma Is 16