Final answer:
Terri's taxable income is $4,100, which includes only the interest income exceeding her $1,100 standard deduction as a dependent minor; earnings from her part-time jobs are not taxable because they do not surpass the standard deduction for single filers in 2023.
Step-by-step explanation:
To determine Terri's taxable income, it is crucial to calculate her gross income and consider the tax regulations applicable to minors. In 2023, Terri earned $5,200 in interest income and $3,000 from part-time jobs.
For tax purposes, minors, like Terri, have different thresholds for taxing interest and earned income. The first step involves assessing the interest income. As of 2023, only interest income exceeding $1,100 is subject to taxation for minors. In Terri's case, her taxable interest income is calculated by subtracting the exemption amount from her total interest income: $5,200 - $1,100 = $4,100. This represents the portion of her interest income that is subject to taxation.
Next, the earned income from part-time jobs must be considered. For minors in 2023, only earned income over $12,950 is subject to taxation. In Terri's situation, her earnings from part-time jobs amount to $3,000, which is below the threshold. Therefore, her earnings from part-time jobs are not taxable, as they do not exceed the standard deduction for a single filer in 2023.
In summary, Terri's taxable income for the year is determined by her taxable interest income, which is $4,100. The earnings from part-time jobs do not contribute to her taxable income as they fall below the applicable threshold. This understanding of the tax regulations for minors ensures an accurate calculation of Terri's taxable income in compliance with the established guidelines for the tax year 2023.