Hello! I was wondering if anyone dealt with this issue - my child has an inherited IRA. We pulled out 2500 last year and received 1099-R. When I input 1099-R into Turbo Tax (I have Premier - home and business), it calculates a tax of 121. Income is listed as 2500 and standard deduction as 1300 (calculated by TurboTax). What's leftover is 1200 with 10% tax. Am I doing something wrong? I thought that 2500 is not taxed. Thank you!
The standard deduction is lower for dependent child.
Dependents – If you can be claimed as a dependent by another taxpayer, your standard deduction for 2024 is limited to the greater of: (1) $1,300, or (2) your earned income plus $400 (but the total can't be more than the basic standard deduction for your filing status).
Inherited retirement income is unearned income, and the standard deduction is $1,300.
Please read this IRS document for more information.
The standard deduction is lower for dependent child.
Dependents – If you can be claimed as a dependent by another taxpayer, your standard deduction for 2024 is limited to the greater of: (1) $1,300, or (2) your earned income plus $400 (but the total can't be more than the basic standard deduction for your filing status).
Inherited retirement income is unearned income, and the standard deduction is $1,300.
Please read this IRS document for more information.