Montague (age 15) is claimed as a dependent by his parents Matt and Mary. In 2014, Montague received $5,000 of qualified dividends and he received $800 from a part time job. What is his taxable income for 2014?

Question

Quizplus · Accepted Answer

Montague's total income is $5,800 ($5,000 of qualified dividends + $800 from part-time job).

Since he is claimed as a dependent by his parents, his standard deduction is limited to the greater of $1,000 or his earned income plus $350, up to the regular standard deduction amount of $6,200.

In this case, Montague's earned income plus $350 is $1,150 ($800 + $350), which is less than the standard deduction of $1,000. Therefore, his taxable income is $4,650 ($5,800 - $1,000 standard deduction - $150 personal exemption).

Montague (Age 15) Is Claimed as a Dependent by His