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Deductions & credits
The usual reason is you are a dependent. A dependent's standard deduction is limited to $1100 or $350 plus his earned income (but no more than $12,400). This is to be sure that he pays some tax on any unearned income he has. That is, the standard deduction is limited to $1100 against unearned income (interest, dividends, capital gains, unemployment, etc).
Taxable scholarships are counted as earned income for the standard deduction, but not anything else (IRA contributions, earned income credit, etc)
‎January 31, 2021
3:04 PM