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    #16
    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.
    "You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard

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      #17
      Originally posted by FEDUKE404
      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.
      "You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard

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        #18
        Hiring your children

        Originally posted by FEDUKE404
        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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          #19
          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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            #20
            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?
            "You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard

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              #21
              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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