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?
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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