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jakemia
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Joined: 20 Aug 2011
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Posted: 26 Feb 2012 at 18:57 \| IP Logged

And...

Exemptions that are allowed for the taxpayer and spouse are designated as personal exemptions. Those exemptions allowed for the care and maintenance of other persons are called dependency exemptions. An individual cannot claim a personal exemption if he or she is claimed as a dependent by another.

(We have to assume that this person's parents are filing a tax return and that her parents are claiming her as a dependent since she is under 24 and a fulltime student.)

audreyP
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Posted: 27 Feb 2012 at 08:32 \| IP Logged

None of the answers is completely correct. However, B is the best
because the other three are wrong.
D is wrong. Depend has to file if her total gross income is more than
standard deduction, which is earned income plus 300 up to 5800 (2011,
single). 8000 is greater than 5800. So, if her parents claim her
exemption, she has to file.
On the other hand, if her parents don't claim her, her total gross income
8000 is less than 5800+3700(exemption). She doesn't need to file.
The correct answer should be: if the parents claim her, she has to file. If
the parents don't claim her, she doesn't need to file.

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jakemia
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Posted: 27 Feb 2012 at 16:46 \| IP Logged

I beg to differ.

The question is asking when a dependent must file. In this case, she must file because she has earned income only of over $5,800.

If she has both earned income and unearned income, then the $950/$300 calculation applies.

Earned income is from work. She has no unearned income, ex. interest income, dividend income, etc.

Who gets to deduct the personal exemption is irrelevant because it is used to calculate the tax or refund due. It is not used in calculating the filing requirements.

Please review my previous post above for further clarification.

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