The Tax Formula for Individuals (LO 1.3) lason and Mary are married taxpayers in

Question

The Tax Formula for Individuals (LO 1.3) lason and Mary are married taxpayers in 2017. They are both under age 65 and in good health. For 2017 they have a total of $109,900 in wages and $575 in interest income. Jason and Mary's deductions for adjusted ross income amount to $3,305 and their itemized deductions equal $7,720. They daim two exemptions for the year on their joint tax return Table for the standard deduction Filing Status Single Married, filing jointly 2017 Standard Deduction 6,350 2,700 6,350 9,350 12,700 ng separately ef household Qualitying widow(er) a. What is the amount of Jason and Mary's adjusted gross income? b. In order to mini hire tarable income, Jason Mary wa in the amount of c. What is their taxable income?

Explanation / Answer

a) Adjusted gross income= Wages+Interest income- deduction=109900+575-3305= $ 107,170

b) claim standard deduction, 12,700 (as it is higher than itemized deduction)

c) Taxable income=adjusted gross income-standard deduction-personal exemption

=107170-12700-4050*2= $ 86,370

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