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

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?

Explanation / Answer

7(a)

- standard deduction

Greater of (4000+350) or 1050

7(b)

- standard deduction

Greater of (200+350) or 1050

7(c)

7(d)

- standard deduction

Greater of (5000+350) or 1050

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

Earned income 4000 + interest income 2200 Adjusted gross income 6200

- standard deduction

Greater of (4000+350) or 1050

(4350) Taxable income 1850

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