Question

1. In 1987 Janice had an adjusted gross income of $32,500.

She had medical expenses of $1,135, charitable
contributions of $845, taxes of $4,125, mortgage interest of
$4,335, other interest expenses of $1,800 (40% of this
figure is deductable) and miscellaneous expenses of $999.
How much could she deduct from her adjusted gross
income?

Answer 1

$12,159

Explanation:

To calculate Janice's deductions from her adjusted gross income, we need to add up the amounts of her deductible expenses:Medical expenses: $1,135

Charitable contributions: $845

Taxes: $4,125

Mortgage interest: $4,335

40% of other interest expenses: 0.4 x $1,800 = $720

Miscellaneous expenses: $999

Total deductible expenses = $1,135 + $845 + $4,125 + $4,335 + $720 + $999 = $12,159

Therefore, Janice can deduct $12,159 from her adjusted gross income. Her taxable income would be her adjusted gross income minus her deductions. If we assume that she has no other deductions or credits, her taxable income would be:

Taxable income = Adjusted gross income - Deductions

Taxable income = $32,500 - $12,159 = $20,341