13. What is the additional standard deduction for old age and blindness for a single taxpayer...

13. What is the additional standard deduction for old age and blindness for a single taxpayer versus a married (filing jointly) taxpayer?

14. When determining a dependent’s standard deduction, what formula is used?

15. When determining a dependent’s standard deduction, what income qualifies as earned income and what income qualifies as unearned income?

16. What are the rules applied when determining which parent (in a divorce) may claim a child as a dependent for purposes of claiming the child tax credit in 2018?

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Expert Solution

14.

The standard deduction for an individual for whom an exemption can be claimed on another person's tax return is generally limited to the greater of:

$1,050, or
The individual's earned income for the year plus $350 (but not more than the regular standard deduction amount, generally $6,350).

However, if the individual is 65 or older or blind, the standard deduction may be higher.

Earned income is salaries, wages, tips, professional fees, and other compensation received for personal services you performed. For purposes of the standard deduction, earned income also includes any amounts received as a scholarship that you must include in your gross income.

In short, Your standard deduction may be reduced if you are claimed as a dependent on another person's tax return. If you were another person's dependent during a Tax Year, your standard deduction will generally be limited to the greater of $1,050 or your earned income plus $350.

13.

15.

Earned income: This includes wages, salaries, and other amounts you received as pay for work you actually perform. Taxable scholarship income is also generally included.
Unearned income: Interest, capital gains, and interest are examples of unearned income. Trust distributions of dividends, capital gains, interest, and survivor annuities are also considered unearned income.

16. Only one taxpayer (or married couple filing jointly) may claim any one child for the purposes of the Child Tax Credit and the Additional Child Tax Credit. If a child is claimed as a dependent on more than one tax return, the IRS will determine who gets the claim according to a set of tiebreaker rules. There are situations, such as in the case of divorsed parents, where a child may be claimed as a dependent by more than one person. Generally, only one person (or married couple filing jointly) may receive the tax benefits derived from claiming any one dependent.If you file your tax return and someone else has already claimed your dependent, then the IRS will apply the tiebreaker rules. The IRS tie-breaker rules are applied in the following order: 1. Relationship Test: If only one of the taxpayers claiming the child is the child's parent, then the child will be the qualifying child of the parent. 2. Residence Test: If both parents claim the child but do not file jointly, then the child will be the qualifying child of the parent with whom the child lived for a longer time during the year. 3. Income Test: If the child lived with both parents for an equal amount of time, then the child will be the qualifying child of the parent with the higher adjusted gross income (AGI). 4. No Parent Can Claim: If no parent qualifies to claim the child, the child will be the qualifying child of the person claiming the child who has the highest AGI. 5. No Parent Chooses to Claim: If either parent qualifies to claim the child, but they choose not to, the child will be the qualifying child of the claiming person with the highest AGI, but only if their AGI is higher than that of either parent (if the parents are married and filing jointly, use one half of their combined AGI). 6. Special Rule for Unmarried Parents: If the parents are not married but lived together with their child all year and the child meets all qualifying tests for both parents, then the parents may decide which parent will claim the child as a dependent.

ekkarill92 answered 1 year ago

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