Question

In Cliff's state, the standard deduction is 12% of adjusted gross income, not to exceed $1,000. If Cliff's adjusted gross income is $19,600, how much is his standard deduction?

(A) $960
(B) $1,000
(C) $2,352
(D) $1,200

Answer 1

Cliff's standard deduction is calculated as 12% of his adjusted gross income which is $2,352, but it cannot exceed $1,000. Therefore, his standard deduction is $1,000.

Step-by-step explanation:

The question asks us to calculate the standard deduction for Cliff, given that his adjusted gross income is $19,600 and the deduction is 12% of it, but it cannot exceed $1,000.

First, we calculate 12% of Cliff's adjusted gross income:
0.12 × $19,600 = $2,352.

Since the standard deduction cannot exceed $1,000, Cliff's standard deduction should be $1,000, even though 12% of his income is $2,352.

Therefore, the answer to how much Cliff's standard deduction is (B) $1,000.