Question

Evan graduated from college, and took a job as a deliveryman in the city. Evan was paid a salary of $68,500 and he received $700 in hourly pay for part-time work over the weekends. Evan summarized his expenses below.

Cost of moving his possessions to the city (125 miles away)	$ 1,200
Interest paid on accumulated student loans	2,800
Cost of purchasing a delivery uniform	1,400
Contribution to State University deliveryman program	1,300

Calculate Evan's AGI and taxable income if he files single with one personal exemption. Assume that interest payments were initially required on Evan’s student loans this year.

Evans AGI 66000

Taxable income: 55650 (Incorrect)

Answer 1

Solution:-

Calculate Evan's AGI and taxable income if he files single with one personal exemption. Assume that interest payments were initially required on Evan’s student loans this year:-

Account details	Amount
Salary income	$68,500
Part time income	$700
Total income	= 68,500 + 700 = $69,200
Moving expense	$ 1,200
Student loan	$2,000
AGI	= 69,200 - 1,200 - 2,000 = $66,000
Standard deduction	$6,350
Personal exemption	$4,050
Taxable income	= 66,000 - $4,050 - $6,350 = $55,600

Note :-

Here standard deduction and personal deductions taken from the 2018 deduction table for single tax payer.