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Returning Member

Based off your $14,024 of total taxable income and your Single filing status, the regular income tax you're supposed to pay for the year is $4,028. How can this be?

 
13 Replies
Employee Tax Expert

Based off your $14,024 of total taxable income and your Single filing status, the regular income tax you're supposed to pay for the year is $4,028. How can this be?

We in the Community cannot see your private tax data, but let me make an educated guess.

 

Is it possible that all your income was from a sole proprietorship (Schedule C)? That is, from a 1099-NEC?

 

This causes you to have to pay self-employment taxes, which is 15.7% of your Schedule C profit. Since the minimum income tax bracket is 10%, this makes your effective tax rate for the profit from the Schedule C 25.7% minimum.

 

Also, are you listed as a dependent?

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New Member

Based off your $14,024 of total taxable income and your Single filing status, the regular income tax you're supposed to pay for the year is $4,028. How can this be?

No.  2 Was for my 18 year old son. No 1099s

Employee Tax Expert

Based off your $14,024 of total taxable income and your Single filing status, the regular income tax you're supposed to pay for the year is $4,028. How can this be?

OK, look at your son's 1040. 

 

What is line 15, Taxable Income? $14,024?

 

What is line 16, Tax?

 

What is line 24, Total Tax?

 

Where do you see $4,028? On what line?

 

The answer lies somewhere between these lines.

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New Member

Based off your $14,024 of total taxable income and your Single filing status, the regular income tax you're supposed to pay for the year is $4,028. How can this be?

I just found out it's because he earned 13k in unemployment income. The fact he is 18 means that anything over 2200 in unearned meaning about 11k will get taxed at the parents income tax bracket which is insane. So he basically owed 3300 in unemployment tax and paid 1250. Gotta love the government 

Employee Tax Expert

Based off your $14,024 of total taxable income and your Single filing status, the regular income tax you're supposed to pay for the year is $4,028. How can this be?

So he had $27k in income?

 

"The fact he is 18 means that anything over 2200 in unearned meaning about 11k will get taxed at the parents income tax bracket " - this seems like you are describing the "kiddie tax".

 

This is where the parents choose to have the child's income taxed at the parents' rate.

 

But is your son really your dependent? Did he live with you more than half the year? Did he pay more than half of his own support? It seems odd to me that a "child" grossing $27k is still anyone's dependent. 

 

And his tax bill would sure be less if he filed on his own.

 

Please review the requirements to be a dependent in IRS Pub 17.

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Returning Member

Based off your $14,024 of total taxable income and your Single filing status, the regular income tax you're supposed to pay for the year is $4,028. How can this be?

Well, it looks like I won't be claiming him and I'll just take the hit since it changes his status from owing 2k to getting a refund of 550.00. He basically lived out of the home half the year anyway. Feel Free to shoot me any pointers to [phone number removed]

Chris [PII removed]

RE/MAX CFO

 

 

Returning Member

Based off your $14,024 of total taxable income and your Single filing status, the regular income tax you're supposed to pay for the year is $4,028. How can this be?

I am very curious how turbotax knows my income bracket to tax my son when I do not file through them 

Employee Tax Expert

Based off your $14,024 of total taxable income and your Single filing status, the regular income tax you're supposed to pay for the year is $4,028. How can this be?

The kiddie tax is filed on your return, not his (in fact, with the kiddie tax, he doesn't file a return). So I am a bit concerned that we are not talking about the same thing.

 

I don't see how you would take a hit. Are you saying that he was trying to file his own return and got a tax bill of $4k on 27k of gross income? Something is not right here.

 

"Feel Free to shoot me any pointers to "

 

The Community is here to answer specific questions on tax issues, knowing that we do not have access to your private tax data.

 

It sounds like you would prefer to use TurboTax Live, where you would be able to either speak one-on-one with a credentialed tax professional or even have a credentialed tax professional do and sign your return. In both cases, the tax professional can see your private tax data so long as you are using an Online product.

 

Please see this TurboTax Live webpage.

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Returning Member

Based off your $14,024 of total taxable income and your Single filing status, the regular income tax you're supposed to pay for the year is $4,028. How can this be?

He was filing single and not claiming himself which is where the issue came from of him owing 2k based on the 10k extra unearned income. I'm told that over the 2200 permitted gets taxed at my income bracket. However, I am wondering where they come up with what my I come bracket is in order to give him the amount he owes. The program just came up with that. Still a little clueless on that since I never entered any personal info regarding my income. 

 

 

Employee Tax Expert

Based off your $14,024 of total taxable income and your Single filing status, the regular income tax you're supposed to pay for the year is $4,028. How can this be?

On his return the income was not taxed at your rates, but rather, since he indicated he was dependent, he qualified for a much lower standard deduction. 

 

His standard deduction would only be about $1400 based on his earned income. You would see that on line 12 of his form 1040.

 

Here is a link to help explain the reduced standard deduction for dependents.  See table 8. 

 

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Returning Member

Based off your $14,024 of total taxable income and your Single filing status, the regular income tax you're supposed to pay for the year is $4,028. How can this be?

His deduction was still 2400. The cpa who reviewed it said it was because he was taxed on my income bracket.

Employee Tax Expert

Based off your $14,024 of total taxable income and your Single filing status, the regular income tax you're supposed to pay for the year is $4,028. How can this be?

A standard deduction of $2400 is well below the standard deduction of $12,400 for one who is not a dependent.

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Returning Member

Based off your $14,024 of total taxable income and your Single filing status, the regular income tax you're supposed to pay for the year is $4,028. How can this be?

Typo....12,400

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