Question
Im working on an accounting project and Im conflicted as to how I calculate line 16 for a 1040 tax return. (We are using 2021
Im working on an accounting project and Im conflicted as to how I calculate line 16 for a 1040 tax return. (We are using 2021 IRS tax rates)
My AGI is $80,734.67
My standard deduction is $27,800 plus $600 for charitable contributions = $28,400
My taxable income is $52,334.67
My qualified dividend + long term capital gain is $4,904.41 (fall into the 0% tax rate for AGI)
My question is: do I use the 2021 Tax Table which gives me a 12% tax rate on the remaining amount (minus LTCG and the qualified dividend) at $5,691.63 or do I use the calculation: $1,990 plus 12% of the excess over $19,900 (which is in my textbook as a 2021 Tax Rate Schedule) and gives me $5,293.63???
Please explain your answer as I am stumped and so confused, thank you!
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started