you have a gross income of $117,151 and are filing your tax return singly. you claim one exemption and can…

you have a gross income of $117,151 and are filing your tax return singly. you claim one exemption and can take a deduction of $2,713 for interest on your mortgage, an adjustment of $2,791 for business losses, an adjustment of $1,346 for alimony, a deduction of $2,086 for property taxes, a deduction of $2,376 for contributions to charity, and an adjustment of $1,091 for contributions to your retirement fund. the standard deduction for a single filer is $5,700, and exemptions are each worth $3,650. what is the difference between your adjusted gross income and your taxable income?\na. $16,053\nb. $9,350\nc. $10,825\nd. $14,475

you have a gross income of $117,151 and are filing your tax return singly. you claim one exemption and can take a deduction of $2,713 for interest on your mortgage, an adjustment of $2,791 for business losses, an adjustment of $1,346 for alimony, a deduction of $2,086 for property taxes, a deduction of $2,376 for contributions to charity, and an adjustment of $1,091 for contributions to your retirement fund. the standard deduction for a single filer is $5,700, and exemptions are each worth $3,650. what is the difference between your adjusted gross income and your taxable income?\na. $16,053\nb. $9,350\nc. $10,825\nd. $14,475

Answer

Explanation:

Step1: Calculate adjusted gross income

Adjusted gross income (AGI) = Gross income - Adjustments Adjustments = Business losses adjustment + Alimony adjustment+ Retirement - fund adjustment Adjustments = $2,791 + 1,346+1,091 = $5,228 AGI = $117,151 - 5,228=$111,923

Step2: Calculate total deductions

Total deductions = Mortgage - interest deduction+ Property - taxes deduction+ Charity - contributions deduction+ Standard deduction (whichever is greater between itemized and standard) Itemized deductions = $2,713+2,086 + 2,376=$7,175 Since $7,175>5,700 (standard - deduction), total deductions = $7,175

Step3: Calculate taxable income

Taxable income = AGI - Total deductions - Exemption Exemption = $3,650 Taxable income = $111,923-7,175 - 3,650=$101,098

Step4: Calculate the difference

Difference = AGI - Taxable income Difference = $111,923-101,098 = $10,825

Answer:

c. $10,825