Filing a 1040 for a dependent child with unearned income of $1600, less standard deduction of $1350 results in taxable income of $250. Yet, Turbo tax says Federal tax liability is "0". Since $250 of taxable income is subject to 10% tax rate, why is turbo tax not showing a tax liability of $25?? Any help would be appreciated.
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If the unearned income is qualified dividends or capital gains it would not be taxed at their income level.
Thank you. With the exception of about $400, non qualified dividends, the remaining $1200 is capital gains and qualified dividends. I trust since the majority is cap gain and qual div, the result is no tax liability. Appreciate your prompt response.
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