Understanding the standard deduction for dependents: the base $1,150 or earned income plus $400, whichever is larger.

Outline (skeleton)

• Hook: Taxes feel like a puzzle, but a few rules keep it approachable—especially for dependents.

• Section 1: What the standard deduction is, in plain language.

• Section 2: The dependent special rule: the $1,150 base or earned income plus $400.

• Section 3: A simple example to make the numbers click.

• Section 4: Why this matters on real returns and what it protects.

• Section 5: Quick notes, common questions, and practical tips.

• Conclusion: A quick recap and where to learn more about these basics.

Tax basics with a friendly twist: the dependent standard deduction

If you’ve ever looked at a tax form and felt a little overwhelmed, you’re not alone. The numbers can look like a jumble at first glance. But a few core ideas unlock the rest. Think of the standard deduction as a built-in shield that lowers the amount of income you’re taxed on. Everyone gets one, but there are special rules when you’re a dependent—someone who can be claimed on another person’s return. That’s where today’s rule comes in.

Let me explain the essence in plain terms. For most filers, there’s a standard deduction that reduces taxable income. For someone who can be claimed as a dependent on another’s return, the IRS has a tailored rule. It’s designed to prevent someone from getting too big a deduction just because they earn a little money, while still acknowledging that earned income should help offset living costs and basic work-related expenses. The result is a straightforward formula that’s easy to apply in real life.

The dependent rule: $1,150 or earned income plus $400

Here’s the key line you’ll bump into in the Intuit Academy Tax Level 1 materials: the standard deduction limit for a dependent is $1,150 or earned income plus $400, whichever is greater. In other words:

• If the dependent’s earned income is less than $1,150, they get a standard deduction of $1,150.

• If the dependent’s earned income is $1,150 or more, you add $400 to that earned income to determine the deduction.

This structure isn’t fancy, but it’s thoughtfully designed. It gives consistent baseline protection—$1,150—while still recognizing that earned income is a direct result of work and costs associated with earning money. The higher your earned income, the higher your deduction, up to that simple formula. The goal is to prevent a dependent with modest income from being taxed too aggressively while still keeping the system fair and predictable.

A practical example to make it crystal

Let’s walk through a couple of quick scenarios so the numbers land clearly.

• Scenario A: A dependent earns $900 during the year.

Since $900 is less than $1,150, the standard deduction is $1,150. The deduction is a flat amount, and you don’t add anything to it because the earned income hasn’t surpassed the threshold. The tax picture gets a little lighter right from the start.

• Scenario B: A dependent earns $1,600 during the year.

Here you take earned income ($1,600) and add $400. That gives $2,000 as the standard deduction. Compare that to the base $1,150, and the rule says you use the higher amount—$2,000 in this case. The higher figure wins, because it reflects the extra earnings and the associated costs of earning them.

• Scenario C: A dependent earns $1,000 and has $0 other income.

The earned income is still $1,000, which is below the $1,150 base. The deduction remains $1,150, since that base amount applies when earned income doesn’t push past the threshold.

If you’re thinking, “Why not just have one number?”—that’s the point. The rule recognizes both the need for a floor and the reality that earned income should influence the deduction. It’s a smart compromise that keeps the process predictable for taxpayers and simpler for the people who help them file returns.

Why this rule matters in real life

The whole point of the standard deduction is to reduce taxable income. For dependents, the equation above prevents someone who is mostly supported by someone else from receiving an outsized tax benefit simply due to earning a little money. It’s a balance between fairness and practicality.

A few quick takeaways:

• The base amount—$1,150—acts as a safety net for dependents with very low or no earned income.

• When earned income exists, the deduction scales with that income, via the addition of $400 to the earned amount.

• The “greater of” approach (choose the larger between $1,150 and earned income plus $400) keeps the rule straightforward and helps avoid surprises.

Relating the rule to everyday life

Taxes can feel abstract, but this rule maps to everyday work life. If you’re a student who does a few babysitting gigs, lawn care, or campus-side jobs, you’re likely in the dependent category at some point. The rule helps ensure you’re not taxed too heavily on a small paycheck, while still recognizing the need to contribute to your own tax picture when you’re earning more money.

This is also a good reminder that “dependents” aren’t just kids in a household. Some adult dependents—students, relatives, or others who rely on someone else for support—qualify for this deduction treatment. The federal rules aren’t picky about who you are; they’re about how much you earn and how you’re connected to a broader tax situation.

Common questions you might encounter

• Is there a maximum cap to how high the deduction can go under this rule?

The amount is driven by earned income plus $400, up to the point where it’s the greater of $1,150 or that earned-plus-400 calculation. There isn’t a separate ceiling beyond the formula itself; the practical cap is captured by your actual earned income amount.

• What if a dependent has more than one job?

You add the total earned income from all jobs to determine the deduction. If that total is $1,150 or more, you use earned income plus $400; otherwise, you use $1,150.

• How does this interact with other deductions or credits?

The standard deduction reduces taxable income before other credits are applied. Depending on the scenario, other credits or deductions might be available, but the dependent standard deduction will be used where applicable.

• Can this rule change year to year?

Tax rules can be updated, but in this context the concept remains: a base amount plus an earned-income-based increase for dependents. It’s always a good idea to check the latest IRS guidance or trusted tax resources for the exact numbers in a given year.

A quick checklist for dependents

• Confirm who can be claimed as a dependent on someone else’s return.

• Determine the dependent’s earned income for the year.

• Compare earned income plus $400 to $1,150.

• Apply the larger figure as the standard deduction for the dependent.

• Review any other credits or deductions that might apply to the scenario.

Why we care about this rule in the bigger tax picture

Understanding the dependent standard deduction helps you see how tax policy balances work and family life. It’s not about memorizing a single number; it’s about grasping a mechanism that ensures fairness and clarity. When you know how the rule works, you’re better equipped to navigate real-world tax decisions, whether you’re filing for yourself, helping a relative, or simply building a solid foundation for future financial literacy.

A few friendly thoughts to wrap it up

If you’ve ever wondered why the numbers feel both precise and a little flexible, you’re catching the pulse of tax design. The dependent standard deduction is a neat example of that balance—a fixed floor that ensures protection, plus a responsive bump that scales with earned income. It’s the kind of rule that makes sense once you see the logic behind it.

For readers curious to explore more, the broader tax basics—like standard deductions for single filers, who counts as a dependent, and how earned income is defined—fit together like pieces of a larger map. Getting comfortable with these ideas now makes future tax decisions feel less like a guessing game and more like following a clear trail.

If you’d like to keep this conversation going, I’m happy to walk through more real-world scenarios or break down how other deductions and credits interact with the dependent rule. And if you’re curious about broader tax concepts, there are reliable resources and explanations that break things down in plain language, with practical examples you can relate to—from student gigs to part-time jobs and everything in between.

In short: for a dependent, the standard deduction is the greater of 1,150 or earned income plus 400. Simple, practical, and designed to help more taxpayers keep more of their earnings when it’s earned income that actually supports daily life. It’s a small rule, but it packs a meaningful punch in the big picture of tax fairness.

If you want to explore more about these kinds of topics—how the IRS defines earned income, what counts as a dependent, or how to read a Form 1040 with confidence—there’s a world of clear, friendly explanations out there. The core idea is straightforward, and once you’ve got it, you’ll find your way through the rest of the tax landscape with a bit more ease.