Susan is 17 and is claimed as a dependent by her parents.In 2016,she earns $1,000 from a summer job and receives $2,400 of interest from a savings account.How much of Susan's income is taxable at her parents' marginal rate?

Question

Quizplus · Accepted Answer

Since Susan is claimed as a dependent by her parents, she cannot claim her personal exemption of $4,050. Therefore, her taxable income is calculated as follows:
Total income = $1,000 + $2,400 = $3,400
Less: Standard deduction for a dependent = $1,050
Taxable income = $2,350
Susan's taxable income of $2,350 falls in the 10% tax bracket. Therefore, the amount of her income taxable at her parents' marginal rate is $300, which is the difference between her total income and her taxable income at the 10% tax bracket.

Susan Is 17 and Is Claimed as a Dependent by Her