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    #16
    Originally posted by FEDUKE404 View Post
    I guess I was getting confused where you appeared to reply to Arlo, earlier today, that a "dependent" could automatically get a 2018 federal standard deduction of $12k.
    Well, I'm not sure why this thread didn't end with my initial reply, post #2. It seems like all the OP's questions were answered right then.

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      #17
      working dependent

      Robert your first answer was confusing to me. The answer should have been YES. If the working dependent makes 10,000 his standard deduction is going to be 12,000 with negative taxable income. If he makes 13000 his standard deduction is going to be 12,000 with taxable income of 1000. The 11,650 and more was confusing. But until someone else comes up with something different I think we all agree the working dependent will get $12,000 standard deduction.

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        #18
        Originally posted by arlo View Post
        Robert your first answer was confusing to me. The answer should have been YES. If the working dependent makes 10,000 his standard deduction is going to be 12,000 with negative taxable income. If he makes 13000 his standard deduction is going to be 12,000 with taxable income of 1000. The 11,650 and more was confusing. But until someone else comes up with something different I think we all agree the working dependent will get $12,000 standard deduction.
        Arlo, you have the first part wrong, if dependent makes $10,000 his standard deduction would be $10,350. not $12,000.

        There are lots of update and tax courses on the Tax Cuts and Job Act, TheTaxBook even has one.

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          #19
          Originally posted by arlo View Post
          Robert your first answer was confusing to me. The answer should have been YES. If the working dependent makes 10,000 his standard deduction is going to be 12,000
          No, the answer was correct as given. Your statement here is wrong. Nothing changed for TCJA except the standard deduction dollar amount. In the past, the standard deduction would typically increase by a small amount each year, due to inflation adjustment. This year, the increase was larger than normal, that's all. Do you understand how it worked for a dependent before TCJA? It's still the same. It seems no matter how many times we repeat that, you still don't get it.
          Last edited by Rapid Robert; 07-27-2018, 04:36 PM.

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            #20
            2018 standard deduction AGAIN

            Originally posted by Rapid Robert View Post
            No, the answer was correct as given. Your statement here is wrong. Nothing changed for TCJA except the standard deduction dollar amount. In the past, the standard deduction would typically increase by a small amount each year, due to inflation adjustment. This year, the increase was larger than normal, that's all. Do you understand how it worked for a dependent before TCJA? It's still the same. It seems no matter how many times we repeat that, you still don't get it.
            Well, FWIW, I still don't completely "get it" either!

            1 -- I fully understand how the standard deduction was calculated for a dependent, with earned income, in years prior to 2018. (No need to "repeat" anything! I've encountered several "real-world" situations in the past.) But, in brief summary, there was a significant difference in the allowable amount of the standard deduction when both wage income and unearned income were involved, even if the total "income" amount was similar. And I won't even venture into the land of Kiddie Tax / Form 8615.
            2 -- For 2018, I remain confused as to whether something similar is now in place for a "dependent" even though, obviously, there is now no personal exemption to consider.
            2A -- Of course, for prior years, the personal exemption amount evaporated anyway for the dependent. . .moot point!

            So, since I'm obviously mentally challenged, let me know the answers to these scenarios for 2018 for a dependent who is being claimed as such on the parental tax return:

            A -- Dependent makes $6,000 from a summer job. No other income. What is the standard deduction?
            B -- Dependent makes $6,000 from a summer job and has qualified dividend income, from stocks gifted from a doting grandparent, in the amount of $6,000. What is the standard deduction?
            C -- Dependent spent most of the summer at the beach and had only $1,000 of wage income. Dividend income, same source as above, in the amount of $6,000. What is the standard deduction?

            FE

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              #21
              Originally posted by FEDUKE404 View Post
              A -- Dependent makes $6,000 from a summer job. No other income. What is the standard deduction?
              B -- Dependent makes $6,000 from a summer job and has qualified dividend income, from stocks gifted from a doting grandparent, in the amount of $6,000. What is the standard deduction?
              C -- Dependent spent most of the summer at the beach and had only $1,000 of wage income. Dividend income, same source as above, in the amount of $6,000. What is the standard deduction?
              A - $6,350

              B - $6,350

              C - $1,350

              Now for C, maybe it would be more illustrative if you had used $500 of wage income, in which case the answer would be, $1,050.

              Also note that kiddie tax on unearned income is now calculated more simply, using trust tax brackets instead of parent's tax brackets. More simply may also mean higher, however.

              Finally, while you mention "2018 for a dependent who is being claimed as such on the parental tax return", it doesn't matter whether the parents "claim" the child or not. The meaning of "claim" is now somewhat different, I suppose it can mean either using the dependent to support a certain filing status (HoH, QW), or using the dependent for a child/family credit.
              Last edited by Rapid Robert; 07-28-2018, 01:02 PM.

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                #22
                Playing name game for single dependent

                Originally posted by Rapid Robert View Post
                Finally, while you mention "2018 for a dependent who is being claimed as such on the parental tax return", it doesn't matter whether the parents "claim" the child or not. The meaning of "claim" is now somewhat different, I suppose it can mean either using the dependent to support a certain filing status (HoH, QW), or using the dependent for a child/family credit.
                UNCLE!! UNCLE!!

                Let's just say a person of young age "who is a factor on the parent's tax return."

                In olden days, the pertinent question was whether an individual could "qualify" as a dependent of another person.
                Oh yes, in days of yore you could have a "youthful person" who qualified an adult to use HOH, but the adult might not be able to claim the dependency exemption.
                And on the flip side, in the same days of antiquity, you could have a situation where a "youthful person" was rightfully claimed as a dependent by the adult, but the adult was precluded from filing HOH.

                This horse has now been fully pulverized.

                At least we can now, perhaps, agree that every "single" individual does **NOT** automatically get a $12,000 standard deduction for 2018??

                Of course, as is often noted, I ain't none too bright in overall tax knowledge.

                FE

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                  #23
                  Hiring your children

                  Originally posted by FEDUKE404 View Post
                  UNCLE!! UNCLE!!

                  Let's just say a person of young age "who is a factor on the parent's tax return."

                  In olden days, the pertinent question was whether an individual could "qualify" as a dependent of another person.
                  Oh yes, in days of yore you could have a "youthful person" who qualified an adult to use HOH, but the adult might not be able to claim the dependency exemption.
                  And on the flip side, in the same days of antiquity, you could have a situation where a "youthful person" was rightfully claimed as a dependent by the adult, but the adult was precluded from filing HOH.

                  This horse has now been fully pulverized.

                  At least we can now, perhaps, agree that every "single" individual does **NOT** automatically get a $12,000 standard deduction for 2018??

                  Of course, as is often noted, I ain't none too bright in overall tax knowledge.

                  FE
                  This just made hiring your children that much more lucrative too. A $12,000 Standard Deduction means you can pay your child, in your business, up to $12,000 and the kiddo has his income wiped out by the new Standard Deduction. Not a bad deal!
                  Circular 230 Disclosure:

                  Don't even think about using the information in this message!

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                    #24
                    Originally posted by arlo View Post
                    Thanks gentlemen for your threads but I am talking about 2018 earned income by a dependent child. I want to know the formula used to calculate the tax if it has been released.
                    2018 tax issues have not been finalized. Are you asking for withholding purposes? If so, no matter the age, a single taxpayer should file a single-0 W-4. If for any other reason then research irs.gov
                    Believe nothing you have not personally researched and verified.

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                      #25
                      Originally posted by taxea View Post
                      2018 tax issues have not been finalized. Are you asking for withholding purposes? If so, no matter the age, a single taxpayer should file a single-0 W-4. If for any other reason then research irs.gov
                      Many issues have been finalized. Why should a single dependent taxpayer file W-4 as you suggest if they are eligible to be exempt from withholding?

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                        #26
                        It's called tax planning

                        Originally posted by taxea View Post
                        2018 tax issues have not been finalized. Are you asking for withholding purposes? If so, no matter the age, a single taxpayer should file a single-0 W-4. If for any other reason then research irs.gov
                        Laura -Under the circumstances described, a client could pay their child (to do legit work), get a deduction to save taxes on the parent's return yet the kid owes no tax. A win-win situation.

                        My clients love me when I have such advice for them.

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