Taxable Income: Deductions and Exemptions
1. Joe and Jane are married taxpayers who file a joint return. They have itemized deductions of $11,250 and four exemptions. Assuming an adjusted gross income of $40,000, what is their taxable income for 2008?
2. Compute Marie's taxable income for 2008, assuming she is single and claims two dependent children. Her adjusted gross income is $70,000 and she has itemized deductions of $9,000.© SolutionLibrary Inc. solutionlibary.com 9836dcf9d7 https://solutionlibrary.com/business/accounting/taxable-income-deductions-and-exemptions-7gop
...ss income = 40,000
Less: Itemized deductions = 11,250
Less: Personal exemptions = 14,000
Taxable income = 14,750.
Actual itemized deductions are used because they are greater than the standard ...