Question

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?

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