Question

USE 2018 TAX RULES 7(a). Bob is 17 years old and can be claimed as a...

USE 2018 TAX RULES

7(a). Bob is 17 years old and can be claimed as a dependent by his parents. He has $4,000 of income from a summer job and $2,200 of interest income. What’s his taxable income?

(b). Bill is 17 years old and can be claimed as a dependent by his parents. He has $200 of income from an after-school job and $2,200 of interest income. What’s his taxable income?

(c). Barry is 17 years old and can be claimed as a dependent by his parents. He has $15,000 of income from a summer job and $2,200 of interest income. What’s his taxable income?

(d). Lisa is 17 years old and is a dependent of her parents. She has income from a summer job of $5,000 and she has $6,500 of interest income on corporate bonds. So her gross income is $11,500. What is her taxable income? How much of her taxable income is Net Unearned Income, subject to taxation under the kiddie tax rules?

Homework Answers

Answer #1

7(a)

Earned income 4000
+ interest income 2200
Adjusted gross income 6200

- standard deduction

Greater of (4000+350) or 1050

(4350)
Taxable income 1850

7(b)

Earned income 200
+ interest income 2200
Adjusted gross income 2400

- standard deduction

Greater of (200+350) or 1050

(1050)
Taxable income 1350

7(c)

Earned income 15000
+ interest income 2200
Adjusted gross income 17200
- standard deduction greater of (15000+350) or 1050, but not more single tax payer standard deduction of 12000 (12000)
Taxable income 5200

7(d)

Earned income 5000
+ interest income 6500
Adjusted gross income 11500

- standard deduction

Greater of (5000+350) or 1050

5350
Taxable income 6150

taxable income, Net Unearned Income, subject to taxation under the kiddie tax rules is lower of interest income or taxable income.

Here it is 6150

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