Question

Kevin, while calculating his tax adjustments, notes that he can make adjustments of $3,435 for contributions to his retirement plan, $3,393 for business losses, and $1,128 for business expenses. If Kevin’s gross income is $45,942, what is his adjusted gross income?

a. $53,898
b. $40,242
c. $41,421
d. $37,986

Answer 1

Answer: Option 'D' is correct.

Explanation:

Since we have given that

Amount of Kevin's gross income = $45942

Amount he contribute to his retirement plan = $3435

Amount he lost in business losses = $3393

Amount he incurred in business expenses = $1128

So, His adjusted gross income will be

`45942-(3435+3393+1128)\\\\=45942-(7956)\\\\=\$37986`

Hence, his adjusted gross income is $37,986.

Hence, Option 'D' is correct.

Answer 2

Gross income is An individual's total personal income, before accounting for taxes or deductions. so the adjusted gross income can be calculated using

AGI = GI – D

Where AGI is the adjusted gross income

GI is the gross income

D are the deductions

AGI = 45942 – ( 3435 + 3393 + 1128 )

AGI = $ 37,896