Hester (age 17)is claimed as a dependent by his parents, Charlton and Abigail. In 2020, Hester received $10,000 of qualified dividends, and he received $13,000 from a part-time job. What is his taxable income for 2020? (Standard deduction)

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Hester's taxable income includes his earned income from the part-time job plus his unearned income (qualified dividends) minus the standard deduction for a dependent. For 2020, the standard deduction for someone who can be claimed as a dependent on someone else's tax return is the greater of $1,100 or the individual's earned income plus $350, but not more than the basic standard deduction for an unearned income, which was $12,400 in 2020. Therefore, Hester's standard deduction is $13,000 (earned income) + $350 = $13,350, but it is capped at $12,400. His taxable income is his total income ($23,000) minus the standard deduction ($12,400), which equals $10,600.

Hester (Age 17)is Claimed as a Dependent by His Parents