How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Robin D. Your Own Question

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7225
Experience:  15years with H & R Block. Divisional leader, Instructor
Type Your Tax Question Here...
Robin D. is online now
A new question is answered every 9 seconds

During 2011 my now 20 year-old daughter cashed some EE US savings

Resolved Question:

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.
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Robin D :

Hello and thank you for using Just Answer,
As a dependent your daughter cannot claim the education expenses. Your daughter can still itemize her deductions, even if claimed as a dependent. She can claim medical expenses (that are over 7.5% of her Adjusted Gross Income) that she paid for herself. If the money from the bonds was used for this and she is taxed on the bonds then she can use the medical.
It may be beneficial to look at itemizing for her if it will be greater than the standard deduction she gets to use.


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




  1. $950, or




  2. The individual's earned income for the year plus $300 (but not more than the regular standard deduction amount, generally $5,800).

    Alternative Minimum Tax is an additional tax.



Robin D :

SIzeable investments could trigger AMT even at your daughter's age. It is not age that counts but where the income came from and the amount. This simplifies it a bit, I know.

Robin D :

Please be aware that you are rating my courtesy and service as a professional, and not necessarily whether you like the information that you are receiving.

Customer:

I need some clarification on the AMT. As I understand it, the income earned from the savings bonds are taxable as regular income. Would the AMT cause a greater tax burden than would happen with regular income tax or in addition to regular income tax?

Robin D :

Yes, it could

Robin D :

You may have to pay the AMT if your taxable income for regular tax purposes plus any adjustments and preference items that apply to you are more than the AMT exemption amount.
That is straight IRS talk. If you’re using tax software, it will calculate the AMT for you automatically. You’ll notice that if the AMT is lower than the regular tax, you don’t get the taxes lowered. You only get to see the AMT tax if you owe more.

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7225
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 4 other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.