Discussion:What am I missing here????
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Discussion Forum Index --> Tax Questions --> What am I missing here????
Taxestaxes (talk|edits) said: | 22 February 2008 |
| I know this has to be a very basic tax question, and I am sure I am going to get soooo much slack from asking this......but......
what makes interest income different from wages? If a student (not claiming himself) has $3000 wages from W2, no tax liability; however if he has $750 interest income; $978 wages; he has tax liability - WHAT AM I MISSING? | |
Death&Taxes (talk|edits) said: | 22 February 2008 |
| The quirks of the law: Since 1970 or so Congress has tried to prevent the wealthy from putting assets in their kids' names to avoid taxation, first with disallowances of standard deductions, then disallowance of exemption and finally the Kiddie tax. At first they came for the dcotors, now they come for everybody. | |
| 22 February 2008 | |
| In this case, I guess it's probably the disallowance of the std deduction, right? It'd be limited to $300 more than his earned income, leaving $450 of the interest to fall through to taxable income... | |
Taxestaxes (talk|edits) said: | 22 February 2008 |
| Thanks Trillium!! Thats is what it is.....I was to the point, I was downloading forms from IRs and doing them by hand, because I thought software was messed up - LOL; what it boiled down to, was parent had done childs and wanted me to efile, but when I entered everything, I had child owing!!! Then he was irate, the son only had $1700 income-how could he owed; I couldnt explain it in plain english-so he had me questioning myself!!!! After years of relying on software to calculate, I forget some of the basics of tax!! Thanks for knocking me in the head!!! LOL | |
| 22 February 2008 | |
| You're missing IRC Sec 63(c)(5). Read it and you'll understand. | |
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