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Standard deductions for dependents

Forum|Forum|7 years ago
June 3, 2019
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I am claimed as a dependent on my parents tax return. I earned $2,957.00, turbo tax says my standard deduction is on $1395 and that I owe the $157 in taxes. If I use the IRS website it tells me that my standard deduction is $3,307 and that I do not owe any taxes? Why is turbo tax different?

TurboTax Home & Biz Windows

Best answer by BillM223

So far as I can see, TurboTax correctly calculates the standard deduction for dependents. Based on your input, though, I agree that the standard deductions sould be the $3,307. Indeed, this is what the IRS Interactive Standard Deduction Calculator says (I presume that's where got the $3,307).

The amount that TurboTax gave you for the standard deduction ($1,395) would be correct if your income were $1,045. See Table 21-3 on page 157 in Publication 17 at https://www.irs.gov/pub/irs-pdf/p17.pdf (perhaps you already have).

As you can see, the standard deduction for a dependent is income plus $350 with a minimum of $1,000 for the standard deduction. So you can see how the $1,395 would happen only if your income were $1,045.

I asume that you have already looked at your income to confirm that it is $2,957.00. Let me make three suggestions:

Since you have the desktop product, you should be able to look at the worksheet called "Std Dedn Wks" which shows how TurboTax determined the Standard Deduction. Go into Forms mode in TurboTax and look for this in the column on the left under "Forms in My Return".
The standard deduction is based only on your earned income (i.e. reported on a W-2 or Schedule C). If you have unearned income (like interest and dividends), then your standard deduction won't be the sum of all your income plus $350, but only your wage income plus $350.
And if that doesn't help, if you auto-imported your W-2, copy down the information, delete the W-2 (look for "Delete" or the trash can icon), then re-enter the W-2 manually (that is, don't enter the employer's EIN but just Continue to the second screen and enter everything at once)

B

BillM223Answer

So far as I can see, TurboTax correctly calculates the standard deduction for dependents. Based on your input, though, I agree that the standard deductions sould be the $3,307. Indeed, this is what the IRS Interactive Standard Deduction Calculator says (I presume that's where got the $3,307).

The amount that TurboTax gave you for the standard deduction ($1,395) would be correct if your income were $1,045. See Table 21-3 on page 157 in Publication 17 at https://www.irs.gov/pub/irs-pdf/p17.pdf (perhaps you already have).

As you can see, the standard deduction for a dependent is income plus $350 with a minimum of $1,000 for the standard deduction. So you can see how the $1,395 would happen only if your income were $1,045.

I asume that you have already looked at your income to confirm that it is $2,957.00. Let me make three suggestions:

Since you have the desktop product, you should be able to look at the worksheet called "Std Dedn Wks" which shows how TurboTax determined the Standard Deduction. Go into Forms mode in TurboTax and look for this in the column on the left under "Forms in My Return".
The standard deduction is based only on your earned income (i.e. reported on a W-2 or Schedule C). If you have unearned income (like interest and dividends), then your standard deduction won't be the sum of all your income plus $350, but only your wage income plus $350.
And if that doesn't help, if you auto-imported your W-2, copy down the information, delete the W-2 (look for "Delete" or the trash can icon), then re-enter the W-2 manually (that is, don't enter the employer's EIN but just Continue to the second screen and enter everything at once)

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