During 2011 my now 20 year-old daughter cashed some EE US savings bonds. Her interest income from them was about 16 thousand dollars. Her entire income for that year including her wages was under 17 thousand dollars.
My daughter is a dependent on her's mother's tax
return. Therefore my daughter's standard deduction
is only 950 dollars and she has no personal exemption.
In April I was helping my daughter file her first ever tax return. We were using an on-line service and some of the questions were about her college expenses that were paid from her income. This looked like a separate issue from her not qualifying for her EE interest being tax exempt if it was used to pay for college.
We didn't have those expense figures handy. An extension was filed and an estimated tax payment was made.
These questions have come up in this matter:
Can my daughter's college expenses be used to reduce her tax liability for 2011? We'd like to know this before trying to gather all of those figures.
Some of my money earned from the bonds paid for medical expenses
for my daughter. Would she be able to itemize deductions
, using those medical expenses? Can she do that as a dependent on her mother's taxes?
While we were working on the tax return for my daughter, the application was calculating Alternative Minimum Tax
. I would think at my daughter's income level the AMT wouldn't apply. If it matters, her at the time long-separated, now divorced, parents had a combined income of less that 80 thousand dollars for 2011. Does The AMT apply in addition to the regular tax?
Thank you for your help in this matter.