Question

Bill is a single taxpayer and is 38 years of age. In 2018, his salary is $28,000 and he has interest income of $1,500. In addition, he has deductions for adjusted gross income of $1,400 and he has $11,000 of itemized deductions. Calculate the following amounts:______.

A. Gross Income
B. Adjusted Gross Income
C. Standard deduction or itemized deduction amount
D. Taxable Income

Answer 1

a. $29,500

b. $28,100

c. $12,000

d. $16,100

Step-by-step explanation:

The computation is shown below:

a. Gross income

= Salary + interest income

= $28,000 + $1,500

= $29,500

b. Adjusted gross income

= Gross income - deductions for adjusted gross income

= 29,500 - $1,400

= $28,100

c. The standard deduction or itemized deduction for the year 2018 is $12,000

d. Taxable income

= Adjusted gross income - standardized deductions

= $28,100 - $12,000

= $16,100