What does the tax structure look like for dependents making above $5450?

Question

A link to this information in detail will be just as if not more helpful.

From my understanding, the income of a dependent will not be taxed until it is above $5450. What begins to happen at this point? I'm sure it's not automatically a 40 percent rate, since then making $5449 would be thousands more than making $5450. My guess is that any earnings above $5450 would be taxed at maybe 50 percent or so, but of course these are purely guesses.

Any information here is helpful. I think I will call the IRS customer service, but any background will help. Thanks!

Answer 1

In simplest terms: Take the earnings, subtract $5450 apply it to this table. This is for 2007. The numbers will be adjusted upward slightly for 2008. Most dependents end up just in the 10% bracket.

$0 - $7,825 10% ofthe amount over $0

$7,825 - $31,850 $782.50 plus 15% of the amount over 7,825

$31,850 - $77,100 $4,386.25 plus 25% of the amount over 31,850

$77,100 - $160,850 $15,698.75 plus 28% of the amount over 77,100

$160,850 - $349,700 $39,148.75 plus 33% of the amount over 160,850

$349,700 no limit $101,469.25 plus 35% of the amount over 349,700