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H & W have child, Adam, age 17. Adam has $7,000 of interest income and $2,000...

H & W have child, Adam, age 17. Adam has $7,000 of interest income and $2,000 earned income. What is Adam’s tax liability for 2019?

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Answer #1

Note: Answer is based on assumption that Adam is claimed as dependent by H & W.

All dependent children who earn more than $12,200 of income in 2019 must file a income tax return. However if there is other source/ Investment Income exceed $1100, then a return must be filed for child.

Further the standard deduction is also available upto $12200 for Adam but it will be limited to earned income + $350 I.e = $ 2350 as Adam is claimed as dependent.

Adam has interest income of $ 7000 and earned income of $ 2000 making his total income= $ 9000.

Standard deduction is $ 2350 in total.

Taxable Income = $ 6650

Hence tax liability will arise in case of Adam for 2019. = $ 668.

Note : if Adam is not being dependent then his tax liability would have been NIL as standard deduction of 12200 would be available.

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