Muriel,age 70 and single,is claimed as a dependent on her daughter's tax return.During 2010,she had interest income of $2,400 and $800 of earned income from baby sitting.Muriel's taxable income is:
A)$700.
B)$850.
C)$1,800.
D)$2,250.
E)None of the above.

Question

Quizplus · Accepted Answer

Muriel's taxable income is $700. This is because her gross income is $3,200 ($2,400 + $800), and her standard deduction is $1,200. Her taxable income is therefore $3,200 - $1,200 = $2,000. However, because she is claimed as a dependent on her daughter's tax return, her taxable income is reduced by $1,300, to $700.

Muriel,age 70 and Single,is Claimed as a Dependent on Her