For Tax Year 2020 and beyond, what method will be used to calculate the kiddie tax?...

For Tax Year 2020 and beyond, what method will be used to calculate the kiddie tax?

The parents' marginal tax rate.

Trust rates.

Whichever method provides for the higher tax.

Whichever method provides for the lower tax.

Solutions

Expert Solution

Correct Answer:

Option(2) or Trust rates is used for to calculate the kiddie tax is the correct answer. The years 2018 and 2019 the the parents' marginal tax rate is used for calculating the kiddie tax.But for the year 2020 and beyond trust rates is used for calculating the kiddie tax.

Incorrect Answers:

Option(1) or parents' marginal tax rate is incorrect answer because for the year 2020 and beyond trust rates is used for calculating the kiddie tax. parents' marginal tax rate was used in 2018 and 2019.

Option(3) or whichever method provides for the higher tax is incorrect answer because for the year 2020 and beyond trust rates is used for calculating the kiddie tax.

Option(4) or whichever method provides for the lower tax is incorrect answer because for the year 2020 and beyond trust rates is used for calculating the kiddie tax and before 2020 parents' marginal tax rate was used.

So correct answer is option(2) or Trust rates

ekkarill92 answered 1 year ago

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