Question

A man earned wages of $48,300 received $2700 in interest from a savings​ account, and contributed $2600 to a​ tax-deferred retirement plan. He was entitled to a personal exemption of $3800 and had deductions totaling $6220. Find his gross​ income, adjusted gross​ income, and taxable income.

Answer 1

The man's gross income is $53,600, his adjusted gross income is $43,580, and his taxable income is $33,560.

Step-by-step explanation:

To find the man's gross income, we add up the wages he earned, the interest he received from the savings account, and the contribution he made to the tax-deferred retirement plan. Gross income = wages + interest + contribution = $48,300 + $2,700 + $2,600 = $53,600.

To find the man's adjusted gross income, we subtract his deductions and exemptions from his gross income. Adjusted gross income = gross income - deductions - exemptions = $53,600 - $6,220 - $3,800 = $43,580.

To find the man's taxable income, we subtract his deductions and exemptions from his adjusted gross income. Taxable income = adjusted gross income - deductions and exemptions = $43,580 - $6,220 - $3,800 = $33,560.