report child's earned + unearned income, tax seems a bit high

[samsongli]

Hi, my son who's 18 and full time student, has both earned income $600+ and unearned income $1304 from 2024. TurboTax asked us to file his tax separately, b/c we do not qualify to include his tax return in our jointly tax return. The tax calculated for him is around $150, this seems a bit too much for $600+ earned income plus $4 over the $1300 unearned income tax threshold. 

thx,

Song

[JohnB5677]

I suggest you look at his actual 1040 tax return.  He should get the standard deduction of $14,600.

Log into his account

From the left sidebar

1. Select Tax tools
2. Hint: You may have to minimize the Federal and State selections
3. Click Tools
4. A Menu will pop up
5. Select View tax summary
6. On the left panel click Preview my 1040

Some Key numbers to compare:

• 11 Adjusted Gross Income
• 12 Deductions Should be $14,600
• 15 Taxable income
• 16 Tax
• 33 Total Payments
• 34 Overpayment
• 35a Refund
• 37 Amount you owe

[samsongli]

Thanks, we are using Deluxe on Windows, the UI is a bit different but I was able to find the "Tax Summary" from the "Tools" menu.

It shows the following:

Adjusted Gross Income: $1904.00

Total Deductions

    Itemized/standard deductions: $1300.00 <- I think this is the root cause.

I've checked the software updates and we are up-to-date, more specifically:

Washington State (our resident state) 2/5/2025 Automated Patch Pushing

Program Updates: 3/10/2025

[VolvoGirl]

The 2024 Standard Deduction for an individual for whom an exemption can be claimed on another person's tax return is limited to the greater of:

…..$1,300 or

…..Your earned income for the year + $450 but not more than 14,600))

So you would get a minimum of $1,300

See Table 8 Standard Deduction worksheet for Dependents on Page 26

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

[VolvoGirl]

What kind of earned income did he have?  Did he get a W2 or 1099NEC for it?  If he got a 1099NEC it is filed as self employment on Schedule C and also pays self employment tax on it.

[VolvoGirl]

Must be self employment tax.  The tax on $604 is 61.   The self employment tax on 600 would be $85.  61+85=146

[samsongli]

Yes his earned income is on 1099-NEC.

He's filing his own tax return - we cannot include his tax in our tax return. If I understand you correctly, he should get the greater deduction which is $14,600.

[lvhaccounts]

Yup, that looks like the problem. Did you use the Step-by-Step process for entering his info? If so you can go back through it again.

You can take a short-cut by clicking on the large "Federal Taxes" tab, then the "Deductions and Credits" tab below that. Look through the numbers in the 2024 column to make sure they look correct.

At the bottom, you can click "Continue". TurboTax will then review your entries, do some math, and decide that you should be using the "Federal Standard Deduction".

Do Not check the box to "Change my deduction". Then hit Continue.

Disclaimers: I use Premier, so these steps may be slightly different for you. I haven't checked to see if there are different rules for Earned/Unearned Income, but I can't see how anyone with total earnings under a few thousand would owe any taxes, unless he is a dependent child.

[VolvoGirl]

No.  His Standard Deduction is only the 600 earned income plus 450.  But that is less than the 1300 minimum so he gets 1,300.