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Husband and wife, who live in a common law state, are eligible to file a joint...

Husband and wife, who live in a common law state, are eligible to file a joint return for 2018, but elect to file separately. Wife has adjusted gross income of $42,000 and has $5,500 of expenditures which qualify as itemized deductions. Husband deducts itemized deductions of $16,000. What is the taxable income for the wife?

A) $26,000

B) $30,000

C) $36,500

D) None of the above.

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Answer #1

Answer : Option B ($30,000)

Explanation : Here the wife is filing the return individually.The standard deduction available is $12000. But the itemized deductions were $5500.

The itemized deductions are allowed to be deducted when it is greater than the standard deduction.Here the itemized deductions were less than the standard deduction. Therefore the standard deduction is allowed for the deduction.

Therefore taxable income of wife is $42000-$12000

= $30000

Thanks....

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