Question

Oscar had wages = $8,000, interest income = $6,000, and $600 withholding from his wages. He is claimed as a dependent by his mother.

Calculate Oscar’s AGI, taxable income, income tax liability, and federal tax refund or amount due.

Answer 1

Standard deduction applicable = 8000 wages + 350 = 8350

Particulars	Amount	Amount
Gross income:
Salary	$            8,000
Dividends	$            6,000
Capital loss deduction	$                   -
Gross income		$          14,000
For AGI deductions		$                   -
Adjusted gross income		$          14,000
Less:
Standard deduction	$            8,350
Itemized deduction	$                   -
Higher of the two		$            8,350
Taxable income		$            5,650
Income tax liability		$          565.00
[ 0 + ( 5650 - 0 ) × 0.1 ]
Payments:
Withholding	$                600
Child tax credit	$                   -
Total payments		$                600
Refund due		$                  35