Amy incurs and pays the following expenses during the year: (1) alimony of $14,0

Question

Amy incurs and pays the following expenses during the year:

(1) alimony of $14,000 to her former spouse, Ted

(2) Child support of 412,00 to Ted for the care of their son, Arnorld

(3) Medical expenses of $8,000 for herself

(4) Charitable contributions of 43,000 to her church.

(5) Contribution to her traditional IRA of $4,000.

(6) Mortagae interest on her residence of $9,000.

(7) Property taxes on her residence of $1,200.

(8) State income taxes for herself of $4,500.

amy's only income is a $100,000 salary. Calculate Amy's deductions for AGI and from AGI.

Explanation / Answer

Amy's salary:$100,000
Less alimony:-14,000
Less IRA contr. - 4,000
Amy's AGI:$ 82,000

Alimony and the IRA contribution are only two deductions which come right off the top in figuring her adjusted gross income (AGI)

Her total deductions are:

Child support-0-(Child support is not deductible)

Medical expenses $1,850 (You can only deduct medical expenses that exeed 7.5% of your AGI.)

Charity contributions $41,000 (She is limited to cash contributions of no more than 50% of her AGI)

Mortage Interest $9,000 (Allowed in full)
Property taxes $1,200 (Allowed in full)
State income tax $4,500 (Allowed in full)

Her total deductions are $57,550

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