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#2
05-17-2004, 10:44 PM
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 Re: Standard deduction for dependents "Frank S. Duke, Jr." <dukefs[at]one.net> wrote: - quote - > This was sent to me by a client and it seems to be on the
Be careful. The child is under 14 and has investment income> level. The numbers are theoretical. Anybody see anything I > am missing? > Child age 13 is client's daughter. She has about $2000 in > dividend and interest income, W-2 income of $1300 and SE > income of $400. She makes a $1700 deductible contribution > to an IRA based on wage and SE income. She gets a standard > deduction of $1950, $1700 in earned income plus $250. This > eliminates all but $50 of her dividend and interest income. > Does this look right? greater than $1500. The kiddie tax rules apply and AMT may rear its ugly head. Audrey Griffin, EA in GA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#1
04-27-2004, 05:13 PM
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| Re: Standard deduction for dependents - quote - > > Child age 13 is client's daughter. She has about $2000 in
Client did it 2 years ago so it is not changeable at this> > dividend and interest income, W-2 income of $1300 and SE > > income of $400. She makes a $1700 deductible contribution > > to an IRA based on wage and SE income. She gets a standard > > deduction of $1950, $1700 in earned income plus $250. This > > eliminates all but $50 of her dividend and interest income. > > Does this look right? > Yes, but. > I'm too lazy to look up the kiddie tax rules, but depending > on whether that's an issue or not, it seems to me the child > would be much better off in the long run to make the $1700 a > Roth contribution and go ahead and pay a little tax now. point but thanks for the suggestion because given the amount of time the money will be in there, it should be in a Roth. Now that the child is over 14, she could convert to a Roth, pay tax at her rate and never pay tax on this money again. All freely provided advice guarantee correct or double your money back Frank S. Duke, Jr. CPA Cincinnati, OH USA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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04-26-2004, 02:11 AM
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| Re: Standard deduction for dependents - quote - > Child age 13 is client's daughter. She has about $2000 in
Yes, but.> dividend and interest income, W-2 income of $1300 and SE > income of $400. She makes a $1700 deductible contribution > to an IRA based on wage and SE income. She gets a standard > deduction of $1950, $1700 in earned income plus $250. This > eliminates all but $50 of her dividend and interest income. > Does this look right? I'm too lazy to look up the kiddie tax rules, but depending on whether that's an issue or not, it seems to me the child would be much better off in the long run to make the $1700 a Roth contribution and go ahead and pay a little tax now. Phil Marti Topeka, KS << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
04-23-2004, 04:56 AM
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| Standard deduction for dependents This was sent to me by a client and it seems to be on the level. The numbers are theoretical. Anybody see anything I am missing? Child age 13 is client's daughter. She has about $2000 in dividend and interest income, W-2 income of $1300 and SE income of $400. She makes a $1700 deductible contribution to an IRA based on wage and SE income. She gets a standard deduction of $1950, $1700 in earned income plus $250. This eliminates all but $50 of her dividend and interest income. Does this look right? All freely provided advice guarantee correct or double your money back Frank S. Duke, Jr. CPA Cincinnati, OH USA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| deduction, dependents, standard |
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