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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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  1. 31 January, 12:03
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    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
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