Hestia (age 17)is claimed as a dependent by her parents, Rhea and Chronus. In 2020, Hestia received $1,060 of interest income from a corporate bond that she owns. In addition, she has earned income of $260. What is her taxable income for 2020?

Question

Quizplus · Accepted Answer

Hestia's taxable income is calculated by subtracting the standard deduction for dependents from her total income. The standard deduction for dependents is the greater of $1,100 or earned income plus $350. Her earned income is $260, so $260 + $350 = $610. Since $1,100 is greater, her standard deduction is $1,100. Her total income is $1,060 (interest) + $260 (earned) = $1,320. Taxable income is $1,320 - $1,100 = $220.

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