TT shows different Standard deduction amount than the IRS tool.

[JoandJerry]

My daughter needs to file her own return. We claim her as a dependent and all the right boxes are checked for this. The IRS tool for this situation shows a standard deduction of 1650 but Turbo tax shows 1656. Am I missing something?

[VolvoGirl · Accepted solution]

What kind of income does she have?  W2 or 1099NEC?  How much is the earned income?  Only wages and self employment count, not interest or dividends.  

The Standard Deduction for an individual for whom an exemption can be claimed on another person's tax return is limited to the greater of:

…..$1,100 or

…..Your earned income for the year + $350 (but not more than 12,400 2021)

So you would get a minimum of $1,100.

See Table 8 Standard Deduction worksheet for Dependents on Page 25

https://www.irs.gov/pub/irs-pdf/p501.pdf

Or the 1040 worksheet on page 32

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

if it is self employment income on Schedule C you have to first deduct 1/2 of the self employment tax.  

[JoandJerry]

I think that's it. W2 is 1306 plus the 350 you pointed out equals the 1656 TT shows. Thanks

I'm just so worried about making a simple mistake and having to deal with the aftermath with the IRS.

[VolvoGirl]

That won't affect her return.   If she only got W2 income she doesn't need to file except to get back any withholding  in box 2.  Is there any?

[JoandJerry]

A little withholding but she has dividends and cap gains which is why she has to file her own return.

[JamesG1]

You may be seeing a standard deduction for a tax return for a dependent?  This IRS publication page 7 states:

The standard deduction for an individual who can be claimed as a dependent on another person's tax return is generally limited to the larger of:

• $1,100; or
• The individual's earned income plus $350,
• But not more than the regular standard deduction (generally $12,550).

[JoandJerry]

What's the difference between being claimed as a dependent and just being able to be claimed as a dependent?

[LeonardS]

If you included your daughter on your tax return she was claimed as a dependent.  If a person is able to be claimed as a dependent that means that they satisfy the requirements to be claimed but for whatever reason have not been claimed by the taxpayer who is qualified to claim them.

@JoandJerry