College student 2018 federal income tax

[Greenbriar]

My first opportunity at calculating 2018 income tax for a full time college student who will earn about 18,000. Unless I'm missing something, he gets the 12,000 std deduction and his tax is 600. Please, correct me if I'm wrong. Thanks.

[TaxGuyBill]

Assuming all of his income is from a W-2 job, yes, that sounds correct.

[Greenbriar]

Assuming all of his income is from a W-2 job, yes, that sounds correct.

Yes, I should have stated it is W-2 income. Thanks much.

[taxmom34]

Is the student exemption still available on W4? when I was doing tax returns back in the day, most students claimed this when getting a job and when tax time came they owed instead of a refund.

[Greenbriar]

Is the student exemption still available on W4? when I was doing tax returns back in the day, most students claimed this when getting a job and when tax time came they owed instead of a refund.

Great point but I can't find anything this morning addressing the standard deduction for college student claimed by parents for 2018.

[Greenbriar]

TTB's "What New" page 1-1 crossed out the reference in 2017 to a dependent's standard deduction being greater than $1,050 or earned income plus $350. Also, on the Inflation Adjusted Amounts chart, page 1-2, this item is blank - and not a zero as on other 2018 lines - which is hard to interpret.

[spanel]

My first opportunity at calculating 2018 income tax for a full time college student who will earn about 18,000. Unless I'm missing something, he gets the 12,000 std deduction and his tax is 600. Please, correct me if I'm wrong. Thanks.

Mostly likely your wrong because you forgot subtract any Education Credits. Most likely they will not owe anything/get a refund.

Chris

[Greenbriar]

TTB's "What New" page 1-1 crossed out the reference in 2017 to a dependent's standard deduction being greater than $1,050 or earned income plus $350. Also, on the Inflation Adjusted Amounts chart, page 1-2, this item is blank - and not a zero as on other 2018 lines - which is hard to interpret.

A later version of the Inflation Adjusted Amounts chart shows the same standard deduct ion in 2018 as in 2017. I also found an article in Forbes confirming same. Just wish I could find something on the IRS site addressing this. Thanks to all who commented.

[New York Enrolled Agent]

A later version of the Inflation Adjusted Amounts chart shows the same standard deduct ion in 2018 as in 2017. I also found an article in Forbes confirming same. Just wish I could find something on the IRS site addressing this. Thanks to all who commented.

How about Rev Procedure 2018-18?

(2) Dependent . For taxable years beginning in 2018, the standard deduction amount under Sec. 63(c)(5) for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of (1) $1,050, or (2) the sum of $350 and the individual's earned income.

[Rapid Robert]

Mostly likely your wrong because you forgot subtract any Education Credits. Most likely they will not owe anything/get a refund.

It's not clear from the original post if the student is a dependent, in which case it might be more beneficial to the family if the parents take any education credits.

As for the main topic, didn't we have a long thread about this just recently?

The ONLY thing that changed for dependent standard deduction in 2018 is the new upper limit of $12K instead of $6,500. Everything else about a dependent standard deduction is exactly the same as it was before. The maximum possible standard deduction for a dependent has always (within my memory, at least) been the same as any other single resident filer. The only difference from a non-dependent is that it can be lower than the max in some cases.

I don't know why people keep on looking for anything more. The last time I looked at TheTaxBook, this information was correctly reflected.

[macheek]

How about Rev Procedure 2018-18?

(2) Dependent . For taxable years beginning in 2018, the standard deduction amount under Sec. 63(c)(5) for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of (1) $1,050, or (2) the sum of $350 and the individual's earned income.

this does not mention any max or upper limit. So, if the students earned income is $20,000, then their standard deduction is $20,350?

[TaxGuyBill]

this does not mention any max or upper limit. So, if the students earned income is $20,000, then their standard deduction is $20,350?

No, it says it can not EXCEED those numbers. If you read §63(c)(5), it is for limiting the Basic Standard Deduction.

[Greenbriar]

It's not clear from the original post if the student is a dependent, in which case it might be more beneficial to the family if the parents take any education credits.

Sorry, I should have been stated that the student is under 21, full time college, claimed by his parents and his W2 income is about $18,000. Parents AGI is approx $130,000. They are not my clients so I'm not sure what they are going to do for 2018. The student asked me out of curiosity what I thought the refund might be and this is my first go at it under new tax law.

[spanel]

Sorry, I should have been stated that the student is under 21, full time college, claimed by his parents and his W2 income is about $18,000. Parents AGI is approx $130,000. They are not my clients so I'm not sure what they are going to do for 2018. The student asked me out of curiosity what I thought the refund might be and this is my first go at it under new tax law.

They are NOT your clients?!? What are you doing giving advise and posting on this site?

Also, I would not rush to the opinion that the parents are going to claim him as he does make $18000. That would be enough to possibly support himself.

Chris

[Greenbriar]

He is my grandson and I was posting a theoretical question.