Question

Ross Martin arrived at the following tax information: Tax Information

Gross salary $ 58,755
Interest earnings 295
Dividend income 245
Standard deduction 12,000
Itemized deductions 11, 430
Adjustments to income 2,100
What amount would Ross report as taxable income?

Answer 1

$45,195

Step-by-step explanation:

The computation of the taxable income is shown below;

But before that following calculations need to be done

Gross income is

= Gross salary + Dividend income + Interest income

= $58,755 + $245 + $295

= $59,295

Now

Adjusted gross income = Gross income - Adjustments to income

= $59,295 - $2,100

= $57,195

And, finally

Taxable income = Adjusted gross income - ( standard deduction or itemized deduction i.e. higher amount

So,

Taxable income = $57,195 - $12,000

= $45,195