Questions: Isabella is a head of household, earned wages of 89,750, received 4200 in interest from a savings account, contributed 6000 to a tax-deferred retirement plan, and had itemized deductions totaling 19,500. Find the gross income, adjusted gross income, and taxable income.

Isabella is a head of household, earned wages of 89,750, received 4200 in interest from a savings account, contributed 6000 to a tax-deferred retirement plan, and had itemized deductions totaling 19,500. Find the gross income, adjusted gross income, and taxable income.
Transcript text: Isabella is a head of household, earned wages of $\$ 89,750$, received $\$ 4200$ in interest from a savings account, contributed $\$ 6000$ to a tax-deferred retirement plan, and had itemized deductions totaling $\$ 19,500$. Find the gross income, adjusted gross income, and taxable income.
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Solution

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Calculate Isabella's gross income.

Determine the total income sources.

Isabella's gross income is calculated by adding her wages and interest income:
\[ \text{Gross Income} = 89750 + 4200 = 93950 \]

\(\boxed{93950}\)

Calculate Isabella's adjusted gross income (AGI).

Subtract the retirement plan contribution from the gross income.

The adjusted gross income is calculated as follows:
\[ \text{AGI} = 93950 - 6000 = 87950 \]

\(\boxed{87950}\)

Calculate Isabella's taxable income.

Determine the greater of itemized deductions or standard deduction.

The greater deduction is:
\[ \text{Greater Deduction} = \max(19500, 18800) = 19500 \]

Subtract the greater deduction from the AGI.

The taxable income is calculated as follows:
\[ \text{Taxable Income} = 87950 - 19500 = 68450 \]

\(\boxed{68450}\)

The gross income is \(\boxed{93950}\).
The adjusted gross income is \(\boxed{87950}\).
The taxable income is \(\boxed{68450}\).

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