Will and Margaret had 98701 in income from their jobs they r

Will and Margaret had $98,701 in income from their jobs, they received $28 in interest

from a savings account, and Margaret earned $400 from a textbook publisher. They had

$3300 withheld and deposited into a tax-deferred retirement account. They are entitled to $12,000 in exemptions for the family and their itemized deductions totaled $21,833. Find the gross income, adjusted gross income, and the taxable income.

Solution

Gross income = Income from job + Interest income + Earning from textbook publisher = 98,701 + 28 + 400 = 99,129
Adjusted gross income = Gross income - deposit in tax deferred = 99129 -3300 = 95829
Taxable income = Adjusted gross income - exemptions for the family - itemized deductions = 95829 - 12000 -21833 = 61996

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