Question

[The following information applies to the questions displayed below.]

This year Jack intends to file a married-joint return. Jack received $172,500 of salary, and paid $5,000 of interest on loans used to pay qualified tuition costs for his dependent daughter, Deb. This year Jack has also paid moving expenses of $4,300 and $28,300 of alimony to his ex-wife, Diane, who divorced him in 2012. (Round your intermediate calculations and final answer to the nearest whole dollar amount.)

a. What is Jack's adjusted gross income?

Answer 1

Ans: Adjusted Gross Income:

Particulars	Amount($)
Salary And gross income	167,500
Less: Alimony	{28,300}
Less: Moving expenses	{4,300}
Modified AGI	134,900
Less: Student loan interest deduction**	(2091.75)
Adjusted gross income	$132,808.25

Working Note:

Phase out reduction percentage= Modified AGI-130,000/30,000

= 134,900-130,000/30,000

= 4,900/30,000

= 16.33%

Phase out amount= person jack maximum deduction before phase out* percentage

= 2500* 16.33%

= $408.25

Education interest expense= 2500-408.25

= $2091.75