Hestia (age 17)is claimed as a dependent by her parents, Rhea and Chronus. In 2020, Hestia received $1,030 of interest income from a corporate bond that she owns. In addition, she has earned income of $230. What is her taxable income for 2020?

Question

Quizplus · Accepted Answer

Since Hestia is claimed as a dependent by her parents, her standard deduction is limited to the greater of either $1,100 or her earned income plus $350, up to a maximum of $12,400 for 2020. In this case, her earned income plus $350 is $580, which is less than $1,100. Therefore, her standard deduction is $1,100.

Her taxable interest income is $1,030, and her earned income is $230. Thus, her total income is $1,260 ($1,030 + $230).

Subtracting her standard deduction of $1,100 from her total income, her taxable income is $160.

Therefore, the correct answer is B: $160.

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