roblem 3-40 (LO. 1, 3, 6, 7) aylor, age 18, is a dependent of her parents. For 2

Question

roblem 3-40 (LO. 1, 3, 6, 7) aylor, age 18, is a dependent of her parents. For 2018, she records the following income: $4,000 wages from a summer job, 51, 800 nterest from a money market account, and $2,000 interest from City of Boston bonds. if an amount is zero, enter "O". a. Determine the following: Taylor's standard deduction for 2018 is s Taylor's taxable income for 2018 is b. Compute Taylor's "net unearned income" for the purpose of the kiddie tax. Click here to access the 2018 tax rate schedule

Explanation / Answer

Wages -. $4000

Money market - $ 1800

Standard deduction = ($4350) as allowed is earned income + $350

Personal deduction = (0) since dependent can't claim personal deduction

Taxable income = $1450  

Money market = $1800 so total unearned income = $1800

Less: 1000 + 1000 standard deduction = ($2000 )

Tax at parents rate = 0

Income tax on taylor = $1450 *10% = $145

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