Question

Paul is single, age 33 and earned a salary of $70,000. In 2019, Paul received a...

Paul is single, age 33 and earned a salary of $70,000. In 2019, Paul received a state tax refund of $2,000 based upon his 2018 state tax return. Paul itemized deductions in 2018 on his federal tax return which included a deduction only State income taxes. Paul's potential itemized deductions for the current year are as follows:

medical expenses $4,000

Charitable contributions $500

Mortgage interest $1,000

Real estate taxes $11,000

Calculate Paul's taxable income for 2019 and Paul's income tax for 2019.

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Answer #1

Salary

70000

State tax refund

2000

Gross income

72000

Deductions for AGI

0

AGI

72000

Greater of standard deduction or itemized deduction

12500

Taxable income 2019

59500

Income tax for 2019 (4543+(22%*59500-39475))

$8949

Medical expense (4000-(10%*72000))

0

Charitable contributions

500

Mortgage interest

1000

Real estate taxes

11000

Total itemized deductions

12500

In 2019, the standard deduction for single filers is $12200

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