Question

Andrea's annual gross pay is $48,000. Her adjustments to income and deductions amount to $7,500. What is Andrea's taxable income and which form should she use to report it?

A.
$55,500; form 1040
B.
$55,500; form W-2
C.
$40,500; form 1040
D.
$40,500; form W-2

Answer 1

The correct answer to the student's question is $40,500 for Andrea's taxable income, and she should report it using Form 1040.

Step-by-step explanation:

Andrea's taxable income can be determined by subtracting her adjustments to income and deductions from her annual gross pay. Given Andrea's annual gross pay is $48,000 and her adjustments to income and deductions are $7,500, her taxable income would be:

$48,000 - $7,500 = $40,500

The appropriate form for Andrea to report her income and file her taxes would be the IRS Form 1040, as it is the standard Federal Income Tax form for individuals. The Form W-2 is actually used by employers to report wages paid and taxes withheld to their employees and the IRS; it is not used by individuals to file their income tax returns.

Therefore, the correct answer is:

• $40,500; Form 1040