Question

Rank the following three single taxpayers in order of magnitude of taxable income (from lowest to...

Rank the following three single taxpayers in order of magnitude of taxable income (from lowest to highest) and explain your results.

Alice: Gross income = $80,000

           Deductions for AGI = $8,000

           Itemized deductions = 0

Brian: Gross income = $80,000

           Deductions for AGI = $4,000

           Itemized deductions = $4,000

Craig: Gross income = $80,000

           Deductions for AGI = $0

           Itemized deductions = $8,000

The most important part is In a paper detail and explain the differences between the standard deduction vs. itemized deduction given the filing status. In addition, compare and contrast deductions for AGI and deductions from AGI (itemized deductions). Thank you

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Answer #1
Description Alice Brian Craig Computation
(1) Gross Income $80,000 $80,000 $80,000
(2) For AGI deductions (8,000) (4,000) 0
(3) Adjusted Gross Income $72,000 $76,000 $80,000 (1)+(2)
(4) Standard Deduction (12,000) (12,0000 (12,000) Single Taxpayer
(5) Itemized Deduction 0 (4,000) (8,000)
(6) Greater of Standard deduction or Itemized Deduction (12,000) (12,000) (12,000)
(7) Personal and Dependency Exemptions 0 0 0 The TCJA suspends personal exemptions for 2018 through 2025
(8) Taxable Income $60,000 $64,000 $68,000 (3)+(6)+(7)
0 0
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