Question

Ada (18), is a dependent of her parents. She had interest income of $50 and wages of $5,800. What is Ada's 2022 federal standard deduction?

Answer 1

Ada's federal standard deduction for 2022 would be her earned income of $5,800 plus $350, totaling $6,150, as it is less than the regular individual standard deduction amount.

Step-by-step explanation:

The student's question pertains to the calculation of Ada's federal standard deduction for tax purposes in 2022. Ada, being 18 years old and a dependent, with an interest income of $50 and wages of $5,800, falls under certain IRS rules for dependents. According to the tax laws, the standard deduction for such a dependent is the greater of $1,100 or their earned income plus $350, but not to exceed the regular standard deduction amount for an individual. In Ada's case, her earned income is her wages, which are $5,800. Therefore, Ada's standard deduction would be her earned income ($5,800) plus $350, capped at the standard deduction for an individual, which is $12,950 for the year 2022.

However, since Ada's earned income plus $350 ($5,800 + $350 = $6,150) is less than the standard deduction for an individual, her standard deduction for 2022 would be $6,150.

Answer 2

Ada's 2022 federal standard deduction would be $6,200, calculated as her earned income ($5,800) plus $400, since it is less than the basic standard deduction for an unclaimed single individual.

Step-by-step explanation:

The student asked about the federal standard deduction for a dependent like Ada who had both interest income and wages. For tax year 2022, a dependent's standard deduction is often limited to the greater of $1,150 or their earned income plus $400, but not more than the basic standard deduction for an unclaimed single individual, which is $12,950 for 2022. Therefore, since Ada's earned income is $5,800, you add $400 to get $6,200, which would be her standard deduction as it is less than the basic standard deduction.