Question

Drew and Meg, ages 40 and 41, respectively, are married and file a joint return. In addition to four dependent children, they have AGI of $125,000 and itemized deductions of $27,000. Compute 2018 taxable income.

Answer 1

Taxable income is $98,000

Step-by-step explanation:

AGI: It refers to the adjusted gross income. It is calculated by deducting the specific deductions from the total gross income.

Taxable income: The taxable income is that income which is to be submitted to the government. It is computed by subtracting the itemized deduction from the adjusted gross income

The computation of the taxable income is shown below:

= Adjusted gross income - itemized deductions

= $125,000 - $27,000

= $98,000