Montague (age 15) is claimed as a dependent by his parents Matt and Mary. In 2017, Montague received $5,000 of qualified dividends and he received $800 from a part time job. What is his taxable income for 2017?

Question

Quizplus · Accepted Answer

Montague's taxable income is calculated by subtracting the standard deduction for dependents ($1,050 or earned income + $350, whichever is greater) from his total income. His earned income is $800, so the deduction is $1,150. His total income is $5,800 ($5,000 dividends + $800 job), so his taxable income is $4,650 ($5,800 - $1,150).

Montague (Age 15) Is Claimed as a Dependent by His