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In 12, find the gross income, the adjusted gross income, and the taxable income.A
Chapter 8, Problem 2(choose chapter or problem)
In Exercises 1–2, find the gross income, the adjusted gross income, and the taxable income.
A taxpayer earned wages of $23,500, received $495 in interest from a savings account, and contributed $1200 to a tax-deferred retirement plan. She was entitled to a personal exemption of $3800 and had deductions totaling $5450.
Questions & Answers
QUESTION:
In Exercises 1–2, find the gross income, the adjusted gross income, and the taxable income.
A taxpayer earned wages of $23,500, received $495 in interest from a savings account, and contributed $1200 to a tax-deferred retirement plan. She was entitled to a personal exemption of $3800 and had deductions totaling $5450.
ANSWER:
Step 1 of 3
Find the gross income.
Gross income is the total income which includes wages, and the interest.
\begin{aligned} \text { Gross Income } & =\text { Wages }+ \text { Earned Interest } \\ & =\$ 23,500+\$ 495 \\ & =\$ 23,995 \end{aligned}
Therefore, the gross income is $23,995.