Shannon is 16 years old and is a qualified dependent of her mother. Shannon earns $1,500 as a counselor at a church summer camp and receives $2,500 of interest on a savings account established by her grandparents. Shannon's 2014 taxable income is:

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Shannon's taxable income is calculated by subtracting the standard deduction for dependents from her total income. Her total income is $4,000 ($1,500 from work + $2,500 interest). The standard deduction for dependents in 2014 is the greater of $1,000 or earned income plus $350, which is $1,850 ($1,500 + $350). Therefore, her taxable income is $4,000 - $1,850 = $2,150.

Shannon Is 16 Years Old and Is a Qualified Dependent