Questions: Find the gross income, the adjusted gross income, and the taxable income. Base the taxable income on the greater of a standard deduction or an itemized deduction. The taxpayer is divorced, filing as single, earned wages of 39,400 with no other taxable income, and had no adjustments. She paid 985 in state taxes.
The gross income is .
Transcript text: Find the gross income, the adjusted gross income, and the taxable income. Base the taxable income on the greater of a standard deduction or an itemized deduction. The taxpayer is divorced, filing as single, earned wages of $\$ 39,400$ with no other taxable income, and had no adjustments. She paid $\$ 985$ in state taxes.
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The gross income is $\$$ $\square$
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Solution
Solution Steps
Step 1: Calculate Gross Income
Gross Income is calculated as the total income before any deductions or adjustments. In this case, Gross Income = $39400.
Step 2: Determine Adjusted Gross Income (AGI)
AGI is calculated by subtracting any allowable adjustments from the Gross Income. Since there are no adjustments, AGI = Gross Income = $39400.
Step 3: Calculate Itemized Deductions
Itemized Deductions are calculated as the sum of all allowable itemized deductions. In this case, Itemized Deductions = $985.
Step 4: Determine Greater Deduction
The greater deduction is determined by comparing the Standard Deduction and the total Itemized Deductions. In this case, the greater deduction is the Standard Deduction = $12400.
Step 5: Calculate Taxable Income
Taxable Income is calculated by subtracting the greater deduction from the AGI. Taxable Income = AGI - Greater Deduction = $27000.
Final Answer:
The Taxable Income for a taxpayer with a filing status of 'single', Gross Income of $39400, and adjustments of $0, considering a Standard Deduction of $12400 and Itemized Deductions of $985, is $27000.