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?

Question

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?

a.
$16,053
b.
$9,350
c.
$10,825
d.
$14,475

Answer 1

The adjusted gross income is calculated by subtracting all the deductions and adjustments from the gross income: $117,151 - $2,713 - $2,791 - $1,346 - $2,086 - $2,376 - $1,091 = $105,748.

The exemptions are worth $3,650 each, so the total exemption amount is $3,650 x 1 = $3,650.

The taxable income is calculated by subtracting the total exemptions and the standard deduction from the adjusted gross income: $105,748 - $3,650 - $5,700 = $96,398.

Therefore, the difference between the adjusted gross income and the taxable income is $105,748 - $96,398 = $9,350.

The correct answer is b. $9,350.

Answer 2

To find the difference between your adjusted gross income (AGI) and your taxable income, you need to subtract your deductions and exemptions from your AGI.

Given:
Gross income: $117,151
Mortgage interest deduction: $2,713
Business losses adjustment: $2,791
Alimony adjustment: $1,346
Property tax deduction: $2,086
Charitable contributions deduction: $2,376
Retirement fund contribution adjustment: $1,091
Standard deduction: $5,700
Exemption: $3,650

First, calculate your AGI:
AGI = Gross income - (Mortgage interest deduction + Business losses adjustment + Alimony adjustment + Property tax deduction + Charitable contributions deduction + Retirement fund contribution adjustment)
AGI = $117,151 - ($2,713 + $2,791 + $1,346 + $2,086 + $2,376 + $1,091)
AGI = $117,151 - $12,403
AGI = $104,748

Next, calculate your taxable income:
Taxable income = AGI - (Standard deduction + Exemption)
Taxable income = $104,748 - ($5,700 + $3,650)
Taxable income = $104,748 - $9,350
Taxable income = $95,398

Finally, find the difference between your AGI and taxable income:
Difference = AGI - Taxable income
Difference = $104,748 - $95,398
Difference = $9,350

Therefore, the difference between your adjusted gross income and your taxable income is $9,350. The correct answer is b. $9,350.