Question

Determine the amount of the standard deduction allowed for 2018 in the following independent situations. In each case, assume the taxpayer is dependent of another taxpayer.

a. Mason, aged 18, has income as follows: $1,900 from a paper route and $10,800 from repairing computers. $

b. Emma, aged 17, has income as follows: $950 in cash dividends from a stock investment, $5,100 from providing dance lessons, and $1,700 from babysitting. $

c. Samuel, aged 13, has income as follows: $100 interest on a bank savings account and $500 from mowing neighbors' lawns. $

d. Gabriel, aged 22, has income as follows: $300 in cash dividends from a stock investment. $

e. Elijah, aged 65, has income as follows: $12,000 from Social Security and $5,200 in wages from a part-time job. $

Answer 1

a) in this case amount allowed for deduction is $6350 ($1,050, or the individual's earned income + $350 whichever is more, but not more than the $6350

Earned income is $12700 )

b) in this situation deduction will be $6350

( $1,050, or the individual's earned income + $350 whichever is more, but not more than $6350

Emma's earned income is $6800 ($5100+$1700) )

c) deduction allowed is $1050

( $1050 or individuals earned income + $350 i.e. $500+$350, whichever is more

Earned income is $500)

D) deduction allowed is $1050

($1050 or individuals earned income + $350, whichever is more but not more than $6350

Gabriel has no earned income)

e) $7100 (5200(earned income) + 350 + 1550)

( Deduction allowed is $1050 or earned income +$350 whichever is more, but not more than $6350

Additionally Elijah can claim deduction of $1550 as he is 65 year old