Hestia (age 17)is claimed as a dependent by her parents, Rhea and Chronus. In 2020, Hestia received $1,000 of interest income from a corporate bond that she owns. In addition, she has earned income of $200. What is her taxable income for 2020?

Question

Quizplus · Accepted Answer

For a dependent child, the standard deduction for 2020 is the greater of $1,100 or the individual's earned income plus $350, but not more than the basic standard deduction amount of $12,400. Hestia's earned income is $200, so adding $350 to this gives $550, which is less than the minimum standard deduction of $1,100. Therefore, her standard deduction is $1,100. Since her total income is $1,200 ($1,000 from interest and $200 earned income), subtracting the standard deduction ($1,100) from her total income leaves her with $100 of taxable income.

Hestia (Age 17)is Claimed as a Dependent by Her Parents