Question

Jeffrey earned a gross income of $78,350 last year. He made $2,489.78 in student loan interest deductions, donated $4,294 to his favorite charities and paid $3,571.32 in home mortgage interest. Jeffrey claims a standard deduction of $11,400 for himself and his non-working spouse. If their exemption is $7,300, what is their taxable income?

Answer 1

The amount of tax deduction income for Jeffery will be gross income less expenses and exemptions.
Total expenses is given by:
(loan interest)+(donations)+(mortgage)+(personal claims)+(exemptions)
=(2489.78+4294+3571.32+11400+7300)
=$29,055.1
thus the taxable income will be:
78350-29055.1
=$49,294.9