A man earned wages of $53 comma 300 , received $1900 in interest from a savings account, and contributed $3200 to a tax-deferred retirement plan. He was entitled to a personal exemption of $2900 and had deductions totaling $5220. Find his gross income, adjusted gross income, and taxable income.

Question

Queen Bee

Business

31 January, 11:36

A man earned wages of $53 comma 300 , received $1900 in interest from a savings account, and contributed $3200 to a tax-deferred retirement plan. He was entitled to a personal exemption of $2900 and had deductions totaling $5220. Find his gross income, adjusted gross income, and taxable income.

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Aileen Love · Answer 1

Gross income = $55,200

Adjusted gross income = $52,000

Taxable income = $43,880

Explanation:

Given:

Wages earned = $53,300

Interest received = $1,900

Tax-deferred retirement plan = $3,200

Personal exemption = $2,900

Deductions totaling = $5,220

Now,

Gross income = Wages earned + Interest received

= $53,300 + $1,900

= $55,200

Adjusted gross income = Gross income - Adjustments

= $55,200 - $3,200

= $52,000

Taxable income = Adjusted gross income - (Exemption + Deductions)

= $52,000 - ($2,900 + $5,220)

= $43,880