Determine the amount of standard deduction for tax year 2013. A) Curtis, age 18,
ID: 2467197 • Letter: D
Question
Determine the amount of standard deduction for tax year 2013.
A) Curtis, age 18, has income as follows: $700 interest from a certificate of deposit and $6,000 from repairing cars.
B) Mattie, age 18, has income as follows: $600 cash dividends from a stock investment and $4,700 from handling a paper route.
C) Mel, age 16, has income as follows: $800 interest on a bank savings account and $700 for painting a neighbor’s fence.
D) Lucy, age 15, has income as follows: $400 cash dividends from a stock investment and $500 from grooming pets.
E) Sarah, age 67 and a widow, has income as follows: $500 from a bank savings account and $3,200 from babysitting.
Requirements: Clearly identify the requirements being addressed. Show all calculations within the cells of the provided Excel spreadsheet. This means that you must use formulas and links so that the thought process can be examined. Make good use of comments to convey your thought process as well. No hard coding of solutions. Submit a single MS Excel file for grading.
Answer Explanation Calculations a b c d eExplanation / Answer
Earned Income + $ 350, ie 6000+350 => 6350, but can not exceed basic standard deduction ie $ 6100. So $ 6100 is her standard deduction
Answer Expalnation Calculation A $3100 Standard deduction is limited to the greater of $1000 or her earned income +$350. Her earned income is $6000 from repairing cars. Interest income is not considered as earned income.Earned Income + $ 350, ie 6000+350 => 6350, but can not exceed basic standard deduction ie $ 6100. So $ 6100 is her standard deduction
B $5050 Her earned income is only the $4700 she received from her paper route as Cash dividends are not earned income Earned Income + $ 350, ie 4700+350 => 5050, standard deduction is the greater of $1000 or $5050 so $5050 is standard deduction C $1050 Her earned income is only the $700 for painting a neighbor’s fence as interest on a bank savings account is not earned income Earned Income + $ 350, ie 700+350 => 1050, standard deduction is the greater of $1000 or $1050 so $1050 is standard deduction D $1000 Her earned income is only the $3200 from babysitting.as cash dividends from a stock investment is not earned income Earned Income + $ 350, ie 500+350 => 850, standard deduction is the greater of $1000 or $850 so $1000 is standard deduction E $5050 Her earned income is only the $500 from grooming pets as $500 from a bank savings account is not earned income, but she will get additional standard deduction $3200 (earned income) + $350 + $1,500(additional standard deduction) => $5050 is standard deductionRelated Questions
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