Michael Dimen wrote:

- quote -

A "standard deduction" and "personal or dependency
exemption" are two separate things, yet your post clearly
shows that you are confused about that.

There is ALWAYS a standard deduction [of some amount]
available to an unmarried taxpayer.

- quote -

Regarding your daughter's exemption, you also make it sound
as if you have a discretionary choice. You do NOT. You may
have some power over one of the five tests needed to claim
another as a dependent (usually, the support test is the one
manipulated), but that does not give you a "willy-nilly"
choice once the year has closed. [The ONLY time there's a
choice is in a "multiple support" arrangement where no one
party has provided 50%+ of the support but two or more of
those providing 10%+ collectively have - and then form 2120
governs.]

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

L K Williams wrote:
- quote -

I don't see a problem with that. Federal law for tax
purposes is what counts. The context of the question was for
federal income tax. Now, there may be NON-TAX problems with
the above, but I believe that all considered that as outside
the scope of the question.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Michael Dimen" <mdimen[at]domaincomputer.com> wrote:

- quote -

There is another issue here that seems to have been
overlooked by the other posters.

Applicable laws differ from state to state but the question
would be how the daughter could be supporting herself
because the father/mother have a parental obligation of
support. If she is spending her money for basic support
items, whatever may be included in the local support
obligation, the parents may have a problem. This is a legal
question and I'm not qualified to expound on the subject.

It just seems to me that it would be hard to sustain a claim
that she is NOT a dependent. So, she needs to file a return
for herself, taking the $750 standard deduction and no
exemption.

L K Williams, CPA
Income Tax Services for Expatriate Americans

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Michael Dimen" <mdimen[at]domaincomputer.com> wrote:

- quote -

Whoever, by the dependency rules, is qualified to take the
deduction can take it. No one else can. Thus, there is no
choice. See the 5 dependency tests to make the
determination.

Don Rosenberg, EA

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Michael Dimen wrote:

- quote -

Actually, you don't have an election. Either you provided
over half her support and you're entitled to claim a
dependency exemption for her, or you are not. If you are
entitled, she cannot take a personal exemption on her own
return whether you claim her or not.

- quote -

See above.

Regards,
Bill
~~~~
Associate Professor of Accounting
Longwood College
Department of Accounting, Economics & Finance
http://www.longwood.edu/staff/wpbrown/
Opinions expressed by me are mine, not my employer's.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Michael Dimen wrote:

- quote -

Hmmm. It seems likely that she will be your dependent,
although not subject to the "kiddie" tax -- you may be able
to adjust that in the unlikely event that "she" spends the
money on her support, so that she supplies more than half of
her support.

If she's a dependent, she gets no personal exemption, and
her standard deduction is limited to earned income plus
$750, so, with these figures, she would have $15,250 of
taxable income, and pay about $1,924 in taxes, while the
benefit to you of the dependency exemption is about
$3050*25% plus $1000, which is $1762.50.

If she were not to be a dependent, she would have
$16000-$3050-$4750=$8200 in taxable income,
producing a tax of about $884.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Michael Dimen" <mdimen[at]domaincomputer.com> wrote:

- quote -

As per Section 151, you are eligable to claim the personal
exemption for your dependant child under the age of 18 (or
student age 24); and since you can claim, they are allowed
zero personal exemption, whether you claim them or not.

SECTION 151. ALLOWANCE OF DEDUCTIONS FOR PERSONAL EXEMPTIONS
... . .
(d) EXEMPTION AMOUNT
For purposes of this section--
(1) IN GENERAL
Except as otherwise provided in this subsection, the term
"exemption amount" means $2,000. {Adjusted for inflation,
now $3,050]

(2) EXEMPTION AMOUNT DISALLOWED IN CASE OF CERTAIN DEPENDENTS
In the case of an individual with respect to whom a
deduction under this section is allowable to another
taxpayer for a taxable year beginning in the calendar year
in which the individual's taxable year begins, the exemption
amount applicable to such individual for such individual's
taxable year shall be zero.

--
Richard A Macdonald, CPA/EA
Dedicated student of Fr Luca Paccioli, Master Juggler.
Gib mir schokolade und niemand wird verletzt!!

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

mdimen[at]domaincomputer.com (Michael Dimen) writes:

- quote -

A little terminology clarification here. No one can "take"
someone else's standard deduction. We're talking about her
personal exemption, which might be taken on her return, as a
dependent on your return, or not at all.

Unless she's supporting herself, she's your dependent.
Since there's no advantage to leaving her personal exemption
unclaimed, you'll claim her as a dependent on your return.
(If she is supporting herself, don't nominate yourself for
parent of the year.)

See IRS Publication 501 for the rules.

Phil Marti
Topeka, KS

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Michael Dimen" <mdimen[at]domaincomputer.com> wrote

- quote -

Michael,

First, the child's standard deduction is only $750 if the
only income is investment income. Then, if the child is
UNDER 14, only the next $750 is taxed at the child's rate
while the rest is taxed at your rate, whether you do a
separate return for the child or include the income on your
return on Form 8814. But you said 14 year old. In that
case you need to file a separate return for her, but her
standard deduction is still only $750, so not all of the
income will be in the 10% bracket. I would assume she is
still your dependent, in which case the exemption for her
goes on your return.

Vida Freeman, EA

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

- quote -

She gets her own standard deduction, you get her personal
exemption.

Helen, EA in PA
Member of The Tax Gang
President, PA Society of Enrolled Agents
Campaigning for NAEA Board of Directors - Looking for YOUR vote

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Michael Dimen <mdimen[at]domaincomputer.com> wrote:

- quote -

The facts of the situation will determine if she is your
dependent or not. If she is, and it certainly seems likely
she is your dependent, then she cannot take the dependency
exemption and so you should.

That being the case, her standard deduction is calculated
based on the lower amount for dependents whose income is all
from unnearned income. Again there is no choice here.
She does not get the full Single standard deduciton.

At least she is 14 and so will not pay the kiddie tax.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Will it make sense for me to file a return for my 14 year
old child taking the standard deduction for her, or should I
take the deduction on my own return? She will have unearned
income of $16,000. Mine (jointly) is > $100k, mostly
earned. Should I take the personal deduction for her on my
1040, or on hers?

Seems to me that she'll be taxed at 10% overall; thus the
deduction she gets is only worth 10 cents on the dollar. If
I'm in a 25% bracket (net), the deduction is worth more to
me. Are there any rules governing who may take this
deduction?

Thanks in advance.

mdimen[at]domainnospamcomputer.com

Please remove the 'nospam' in the address above when replying.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->