Question

3- In 2019, Sheryl is claimed as a dependent on her parent’s tax return. Sheryl did not provide more than half her own support. She received $7,200 from a part-time job. This was her only source of income. She is 16 years old at year-end. What is Sheryl’s tax liability for the year?

4-In 2019, Sheryl is claimed as a dependent on her parent’s tax return. Sheryl did not provide more than half her own support. She received $7,200 of interest income from corporate bonds she received several years ago.    This was her only source of income. She is 16 years old at year-end. What is Sheryl’s tax liability for the year?

Answer 1

3.)		Amount in $
	Gross Income /AGI	7,200
	Less: Standard deduction for dependent on other tax return	7,550	( 350 + Earned Income )
	Taxable Income	0
	Tax laibility for 2019 is $ 0.
4.)	Description	Amount in $	Working
	(1)Gross income/AGI	7,200	interest income is unearned income
	(2) Minimum standard deduction	1,100	Minimum for taxpayer claimed as dependent on another return
	(3) $350 plus earned income	350	$350 + 0 earned income
	(4)Standard deduction for dependent on another tax return	1,100	Higher of (2) or (3)
	(5)Taxable income	6,100	(7,200 - 1,100 )
	(6) Gross unearned income minus $2,200	5,000	(1) − $2,200
	(7)Net unearned income	5,000	Lesser of (5) or (6)
	(8)Kiddie tax	836	[($2600 x 10%) + ((7) - $2600) × 24%)]
	(9)Taxable income taxed at Sheryl’s tax rate	5,264	(5) − (7)
	(10)Sheryl’s income tax rate	10%	Single filing status
	(11)Tax on taxable income using Sheryl’s rate	526	(9) × (10)
	Total tax laibility for 2019	1,362	(8) + (11)