Question

Taylor, age 18, is a dependent of her parents. For 2018, she records the following income: $4,400 wages from a summer job, $1,885 interest from a money market account, and $2,100 interest from City of Boston bonds. If required, round your answers to the nearest dollar. If an amount is zero, enter "0".

a. Taylor's standard deduction for 2018 is $ .

Taylor's taxable income for 2018 is $ .

b. Compute Taylor's "net unearned income" for the purpose of the kiddie tax. $

Compute Taylor's tax liability. $ .

Answer #1

given that

Taylor, age 18, is a dependent of her parents. For 2018,

she records the following income:

$4,400 wages from a summer job,

$1,885 interest from a money market account,

and

$2,100 interest from City of Boston bonds.

For 2018, the standard deduction amount for an individual who may
be claimed as a dependent by another taxpayer cannot exceed the
greater of $1,050 or the sum of $350 and the individual’s earned
income.

Thus standards deduction will be 4400+350 = 4750

Net unearned income will be 1885+0-2100 = 0. Since bond interest is
exempt it will not considered. Hence net unearned income will be
Zero

Taxable Income = 6285-4750 = 1535, thus her tax liability will
950x10% = $ 153.5

Taylor is 13 and is a dependent on her parents taxes.
in 2018 she earned 3400 in wages, 1560 interest from a money market
account, and 2100 interest on a bond. what is her standadr
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liability

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A) $357.
B) $395.
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