Standard Deduction And Exemption
August 8th, 2009
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Question: accounting tax return?
Hello:
I want to ask if a family (3 people) that a year’s income is 25000. Only her parent working and she is in high school. So their standard deduction and exemption is ( 5700+3650)*3=28050. Their employer withheld 8000 of federal income taxes for them. So how do I count their tax due or refund?
Answer: Your math is wrong. The taxpayer only gets one standard deduction.
25000 – 8350 (head of household) – 3(3650) = $5700 in income, $570 in tax, less $400 making work pay credit = $170 in tax. Less possible child tax credit and/or EIC and/or education credit.
The $800 withheld will obviously create a refund situation.
If the adult files as single, the taxable income is $8350, tax $835, less the $400.
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