Question

Nick and Nora are married and have three children in college. They have an adjusted gross income of $47,400. If their standard deduction is $12,600, itemized deductions are $14,200, and they get an exemption of $4,000 for each adult and each dependent, what is their taxable income?

Answer 1

To calculate Nick and Nora's taxable income, subtract the standard deduction and itemized deductions from their adjusted gross income. Subtract the exemption for each dependent from the result. Their taxable income is $8,600.

Step-by-step explanation:

To calculate the taxable income for Nick and Nora, we need to subtract their standard deduction and itemized deductions from their adjusted gross income. They have three dependents, so they will get an exemption of $4,000 for each dependent. Here are the steps:

1. Subtract the standard deduction ($12,600) from the adjusted gross income ($47,400): $47,400 - $12,600 = $34,800
2. Subtract the itemized deductions ($14,200) from the result of step 1: $34,800 - $14,200 = $20,600
3. For each dependent (3 dependents), subtract the exemption ($4,000) from the result of step 2: $20,600 - ($4,000 * 3) = $8,600

Therefore, their taxable income is $8,600.

Answer 2

We know that Nick and Nora are married and have three children who are studying in college.

Also, their gross income = $47,400

Standard deduction = $12,600

Itemized deductions = $14,200

Exemption = $4,000 for each adult and each dependent

⇒ Exemption = 4,000 * 5

⇒ Exemption = $20,000

Taxable Income = Gross Income - Standard Deduction - Itemized Deduction - Exemptions

⇒ Taxable Income = 47,400 - 12,600 - 14,200 - 20,000

⇒ Taxable Income = $600

Hence, their taxable income is $600