Publication 929 - Tax Rules For Children And Dependents

Table 2. Standard Deduction

(her earned income plus $300) on line 1 of Table

Worksheet for Dependents

2. She enters $2,300 (the larger of $2,300 or

Keep for Your Records

$850) on line 3, $5,150 on line 4, and $2,300

Use this worksheet only if someone can claim you (or your spouse, if filing jointly) as a

(the smaller of $2,300 or $5,150) on line 5a.

dependent.

Because Amy is blind, she checks the box for

blindness and enters “1” in box c at the top of

If you were 65 or older and/or blind, check the correct number of boxes below. Put the total

Table 2. She enters $1,250 (the number in box c

number of boxes checked in box c and go to line 1.

times $1,250) on line 5b. Her standard deduc-

tion on line 5c is $3,550 ($2,300 + $1,250).

a. You

65 or older

Blind

Standard Deduction

b. Your spouse, if claiming

spouse’s exemption

65 or older

Blind

of Zero

c. Total boxes checked

The standard deduction for the following de-

pendents is zero.

1. Enter your earned income (defined below) plus $300. If none, enter

•

A married dependent filing a separate re-

-0-.

turn whose spouse itemizes deductions.

•

A dependent who files a return for a period

2. Minimum amount.

$850

of less than 12 months due to a change in

his or her annual accounting period.

3. Compare lines 1 and 2. Enter the larger of the two amounts here.

•

A nonresident or dual-status alien depen-

dent, unless the dependent is married to a

4. Enter on line 4 the amount shown below for your filing status.

U.S. citizen or resident alien at the end of

•

Single or Married filing separately — $5,150

the year and chooses to be treated as a

•

Married filing jointly or qualifying widow(er) with

U.S. resident for the year. See Publication

dependent child — $10,300

519, U.S. Tax Guide for Aliens, for infor-

•

Head of household — $7,550

mation on making this choice.

5. Standard deduction.

Example. Jennifer, who is a dependent of

a. Compare lines 3 and 4. Enter the smaller amount here. If under 65

5a.

her parents, is entitled to file a joint return with

and not blind, stop here. This is your standard deduction. Otherwise,

her husband. However, her husband elects to

go on to line 5b.

file a separate return and itemize his deductions.

b. If 65 or older or blind, multiply $1,250 ($1,000 if married or qualifying

5b.

Because he itemizes, Jennifer’s standard de-

widow(er) with dependent child) by the number in box c above. Enter

duction on her return is zero. She can, however,

the result here.

itemize any of her allowable deductions.

c. Add lines 5a and 5b. This is your standard deduction for 2006.

5c.

Earned income includes wages, salaries, tips, professional fees, and other compensation

received for personal services you performed. It also includes any amount received as a

Dependent’s

scholarship that you must include in income.

Own Exemption

If the child does not pay the tax due on this

Certain dependents cannot claim any stan-

A person who can be claimed as a dependent on

dard deduction. See Standard Deduction of

income, the parent may be liable for the tax.

another taxpayer’s return cannot claim his or her

Zero, later.

own exemption. This is true even if the other

Child’s expenses. Deductions for payments

taxpayer does not actually claim the exemption.

Table 2. Use Table 2 to figure the dependent’s

that are made out of a child’s earnings are the

standard deduction.

Example. James and Barbara can claim

child’s, even if the payments are made by the

their child, Ben, as a dependent on their return.

parent.

Example 1. Michael is single, age 15, and

Ben is a full-time college student who works

not blind. His parents can claim him as a depen-

during the summer and must file a tax return.

Example.

You made payments on your

dent on their tax return. He has taxable interest

Ben cannot claim his own exemption on his

child’s behalf that are deductible as a business

income of $800 and wages of $150. He enters

return. This is true even if James and Barbara do

expense and a charitable contribution. You

$450 (his earned income plus $300) on line 1 of

not claim him as a dependent on their return.

made the payments out of your child’s earnings.

Table 2. On line 3, he enters $850, the larger of

These items can be deducted only on the child’s

$450 or $850. Michael enters $5,150 on line 4.

return.

On line 5a, he enters $850, the smaller of $850

or $5,150. His standard deduction is $850.

Withholding

From Wages

Example 2. Judy, a full-time student, is sin-

Standard Deduction

gle, age 22, and not blind. Her parents can claim

her as a dependent on their tax return. She has

Employers generally withhold federal income

dividend income of $275 and wages of $2,500.

The standard deduction for an individual who

tax, social security tax, and Medicare tax from

She enters $2,800 (her earned income plus

can be claimed as a dependent on another

an employee’s wages. If the employee claims

$300) on line 1 of Table 2. On line 3, she enters

exemption from withholding on Form W-4, the

person’s tax return is generally limited to the

$2,800, the larger of $2,800 or $850. She enters

employer will not withhold federal income tax.

larger of:

$5,150 on line 4. On line 5a, she enters $2,800

The exemption from withholding does not apply

(the smaller of $2,800 or $5,150) as her stan-

1. $850, or

to social security and Medicare taxes.

dard deduction.

2. The individual’s earned income plus $300,

but not more than the regular standard de-

Example 3. Amy, who is single, is claimed

Conditions for exemption from withholding.

duction (generally $5,150).

as a dependent on her parents’ tax return. She is

An employee can claim exemption from with-

However, the standard deduction for a depen-

18 and blind. She has taxable interest income of

holding for 2007 only if he or she meets both of

dent who is age 65 or older or blind is higher.

$1,000 and wages of $2,000. She enters $2,300

the following conditions.

Publication 929 (2006)

Page 5

Publication 929 - Tax Rules For Children And Dependents - 2006 Page 5

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