Question

Find the gross income, the adjusted gross income, and the taxable income.

A taxpayer earned wages of $61,300, received $880 in interest from a savings account, and contributed $2200 to a tax-deferred retirement plan. He was entitled to a personal exemption of $3500 and had deductions totaling $5100.

Answer 1

Gross Income:

$61,300 (wages) + $880 (interest) = $62,180

Adjusted Gross Income:

$62,180 - $3500 (personal exemption) = $58,680

Taxable Income:

$58,680 - $5100 (deductions) = $53,580

Note: The taxpayer's taxable income is $53,580.

Explanation: