Question

Taxable Income. Nick is married and has three children in college. His wife is a homemaker. Nick has an adjusted gross income of $37,400. If Nick’s standard deduction is $11,900, his itemized deductions are $12,200, and he gets an exemption of $3,800 for himself, his wife, and each dependent, what is his taxable income?

Answer 1

taxable income is $21,400

Explanation:

given data

adjusted gross income = $37,400

standard deduction = $11,900

itemized deductions = $12,200

exemption = $3,800

to find out

what is his taxable income

solution

we know that taxable income which is taxpayer is responsible for paying income tax

so taxable income = adjusted gross income - ( itemized deduction or standard deduction ) whichever is higher - exemption .............1

put here value

taxable income = 37,400 - 12,200 - 3,800

taxable income = 21400

so taxable income is $21,400