Final answer:
Janice's standard deduction is the greater of $1,100 or her earned income ($900) plus $350, totaling $1,250. Susan's situation shows how work income affects government support and illustrates the EITC phase-out. The EITC phases out gradually to avoid a poverty trap.
Step-by-step explanation:
The question asks about the standard deduction for Janice, a 16-year-old with earned income and who is claimed as a dependent. The correct answer to this question is a. The greater of $1,100 or ($900 earned income + $350). Therefore, Janice's standard deduction for 2019 would be the larger of these two amounts: $1,100 or her earned income ($900) plus $350, which totals $1,250. Since $1,250 is greater than $1,100, her standard deduction would be $1,250.Regarding the work and income scenario for Susan, a single mother, a table should reflect her work hours, earnings, government support adjustments, and total income. This demonstrates the effects of the earned income tax credit (EITC) and its phased-out reduction in government support as she earns more.
To avoid a poverty trap caused by the reduction of government support akin to the amount earned, phasing out of the EITC is implemented progressively. For example, in 2013, the reduction of the credit for a single-parent family with two children only starts above an earnings threshold and gradually decreases by a certain percentage until reaching an upper income limit.The standard deduction for Janice, as a single dependent student with earned income, would be the greater of $1,100 or ($900 earned income - $350)