Question

1) Max is a 14-year-old dependent of his parents. During 2019, Max earned $1,800 working part-time jobs, and he received $1,500 of interest income from corporate bonds that were given to him last year. What is Max's 2019 taxable income?

Answer 1

$1,150

Step-by-step explanation:

Solution

Recall that:

Max earned income is = $ 1,800

The interest income received is $= 1,500

Thus,

The child taxable income = Child's net earned income + Child's net unearned income - Child's standard deduction

so,

The Standard deduction is greater of $ 1,100 or the sum of $ 350 plus children earned income i.e $ 350 + $ 1,800 = $ 2,150.

Then,

The standard deduction amount is $ 2,150

The taxable income of the child = earned income + unearned income - standard deduction

The taxable income of the child = $ 1,800 + $ 1,500 - $ 2,150 = 1,150

Therefore, Max 2019 taxable income is = $1,150