Answer:To find the woman's gross income, adjusted gross income (AGI), and taxable income, let's go through the provided information:
Gross Income: This includes all income before any deductions.
Gross Income
=
Wages
+
Interest
+
Retirement Contribution
Gross Income=Wages+Interest+Retirement Contribution
Gross Income
=
$
56
,
100
+
$
2
,
400
+
$
3
,
300
Gross Income=$56,100+$2,400+$3,300
Gross Income
=
$
61
,
800
Gross Income=$61,800
Adjusted Gross Income (AGI): This is the woman's gross income minus specific allowable deductions, such as contributions to a tax-deferred retirement plan.
AGI
=
Gross Income
−
Retirement Contribution
AGI=Gross Income−Retirement Contribution
AGI
=
$
61
,
800
−
$
3
,
300
AGI=$61,800−$3,300
AGI
=
$
58
,
500
AGI=$58,500
Taxable Income: This is the AGI minus deductions. The woman can choose between taking the standard deduction or itemizing deductions. We'll calculate both and choose the greater amount.
Taxable Income (Standard Deduction)
=
AGI
−
Standard Deduction
Taxable Income (Standard Deduction)=AGI−Standard Deduction
Taxable Income (Standard Deduction)
=
$
58
,
500
−
$
5
,
950
Taxable Income (Standard Deduction)=$58,500−$5,950
Taxable Income (Standard Deduction)
=
$
52
,
550
Taxable Income (Standard Deduction)=$52,550
Taxable Income (Itemized Deduction)
=
AGI
−
Home Mortgage Interest
−
Charitable Contributions
−
State Taxes
Taxable Income (Itemized Deduction)=AGI−Home Mortgage Interest−Charitable Contributions−State Taxes
Taxable Income (Itemized Deduction)
=
$
58
,
500
−
$
7
,
800
−
$
2
,
600
−
$
1
,
500
Taxable Income (Itemized Deduction)=$58,500−$7,800−$2,600−$1,500
Taxable Income (Itemized Deduction)
=
$
46
,
600
Taxable Income (Itemized Deduction)=$46,600
In this case, the taxable income based on the greater deduction is $52,550.
So, the woman's gross income is $61,800, her adjusted gross income is $58,500, and her taxable income is $52,550.
Explanation: