Question

12. Maura is 13, an only child, a dependent of her parents, and has wages of $6,100 and interest of $3,800. Her parents have taxable income of $125,000. What is maura tax liability for 2020? a. $345 c. $537 d. $759 e. None is correct.

Answer 1

Earned income is the income earned from working i.e Wages .

Unearned income is the income earned from investments.

A child having an earned income only, should file a return only in case the total income is more than the standard deduction .

The dependent needs to file return only if the income is more than the amount in point no. 5 below :

1.Earned Income +$350 $6,100+$350=$6,450 2.Minimum amount $1,100 3.Compare 1 & 2 to select the larger amount $6,450 4.Maximum Amount $12,200 5. Compare 3 & 4 to select lower amount $6,450 6. Gross Income ( Earned + Unearned) $6,100+3,800 9,900 Maura has to file her own return as the income in point 6 exceeds point 5. The total income of Maura is $ 9,900. The standard deduction will be $ 6,450 Hence the taxable income is $ 3,450. The income falls in the tax bracket of 10% where income is between $ 0- $ 9,875 Taxable income of Maura =$ 3,450 x 10%=$345 Hence the option (a) is correct. Option – b ,c and d are not correct .