Compute taxable income.
gross salary 46,660
interest earnings 225.00
dividend income 80.00
one personal exemption 3,400
itemized deductions 7,820
adjustments to income 1,150
What amount would be reported as taxable income?
Income----------46,660
Interest-----------225
Dividends-----------80
Income Adj-------1,150
Sub Total-------48,115
Less Item Ded----7,820
Sub Total-------40,295
Less Exempt------3,400
Taxable Income--36,895
Check my math
To compute the taxable income, you need to subtract the deductions and exemptions from the gross income.
In this case, the given information includes:
- Gross salary: $46,660
- Interest earnings: $225.00
- Dividend income: $80.00
- One personal exemption: $3,400
- Itemized deductions: $7,820
- Adjustments to income: $1,150
To calculate taxable income, follow these steps:
1. Add up the gross income, interest earnings, and dividend income:
Gross income + Interest earnings + Dividend income = $46,660 + $225.00 + $80.00 = $46,965.00
2. Calculate the adjusted gross income (AGI) by subtracting the adjustments to income from the total income:
Gross income + Interest earnings + Dividend income - Adjustments to income = $46,965.00 - $1,150 = $45,815.00
3. Subtract the itemized deductions from the AGI:
AGI - Itemized deductions = $45,815.00 - $7,820 = $37,995.00
4. Finally, subtract the personal exemption from the result:
Taxable income = AGI - Personal exemption = $37,995.00 - $3,400 = $34,595.00
Therefore, the reported taxable income would be $34,595.00.