Question

Bianca and Dave are a married couple filing a joint tax return. They have a combined gross income of $81,031 and claim four exemptions. They can make an adjustment of $2,914 for business expenses, an adjustment of $1,939 for business losses, a deduction of $4,140 for medical expenses, an adjustment of $4,825 for contributions to their retirement fund, and a deduction of $2,420 for charitable donations. If exemptions are worth $3,650 apiece and the standard deduction for a joint return is $8,350, what is their total taxable income?

a.
$50,193
b.
$41,843
c.
$48,403
d.
$52,793

Answer 1

C is correct just took the test

Answer 2

Option B.

Explanation:

Given information:

Gross income = $81,031

Business expenses = $2,914

Business losses = $1,939

Deduction of medical expenses = $4,140

Retirement fund = $4,825

Deduction for charitable donations = $2,420

If exemptions are worth $3,650 apiece and they claim four exemptions.

Total exemptions = 4×3650 = 14600

Deduction for a joint return = $8,350

Formula for taxable income is

Taxable income = Gross income - Exemptions - Total Deduction

Taxable income = 81031-2914-1939-4140-4825-2420-14600-8350

= 41,843

Their total taxable income is $41,843.

Therefore, the correct option is B.