Chapter 18, Problem 18AT

### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

Chapter
Section

### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

# Calculate the missing Information for the following taxpayers. Filing Status Adjustment Adjusted Gross (circle your choice) Standard Itemized Exemption Taxable Name (Exemptions) Income to Income Income Deduction Deductions Allowance Income 18. Huskey Single (1) $34.900$660 $6,520 To determine To calculate: The adjusted gross income, standard deduction, exemption allowance and taxable income of Huskey who is single (unmarried) and claiming one exemption. He is earning$34,900 per year and adjustment to income is $660 and his itemized deductions is$6,520.

Explanation

Given Information:

The total earning of Huskey is $34,900 per year and he is claiming one exemption. Adjustment to income is given as$660 and itemized deduction is $6,520. Formula used: Procedure to calculate taxable income for individuals is given below. Step 1: Find total income by adding all sources of taxable income. Step 2: Calculate adjusted gross income by subtracting the sum of all adjustments to income from total income. Step 3: From the adjusted gross income subtract the sum of the itemized deductions or the standard deduction (whichever is larger). Standard DeductionsSingle or Married filing seperately$6,200Married filing jointly or Qualifying widow(er) with dependent child$12,400Head of household$9,100

Step 4: Multiply $3,950 by the total number of exemptions claimed and subtract from the outcome of step 3 and this result is called taxable income. Calculation: Step 1: Total income of Huskey is given as$34,900 and there is no other source of income for him.

Step 2: Adjusted gross income is calculated in the following way:

Adjustment to income is given as $660. Adjusted gross income=Total incomeSum of all adjustments to income=$34,900$660=$34,240

Step 3: From the adjusted gross income subtract the sum of the itemized deductions or the standard deduction (whichever is larger)

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