Eugene and Velma are married.For 2013,Eugene earned $25,000 and Velma earned $30,000.They have decided to file separate returns and are each entitled to claim one personal exemption.They have no deductions for adjusted gross income.Eugene's itemized deductions are $11,200 and Velma's are $4,000.Assuming Eugene and Velma do not live in a community property state,what is Velma's taxable income?

Question

Quizplus · Accepted Answer

Since Eugene and Velma are filing separate returns, they cannot split their itemized deductions. Velma's taxable income will be calculated as follows:

Velma's gross income = $30,000
Velma's itemized deductions = $4,000
Velma's personal exemption = $3,950

Velma's taxable income = Gross income - Itemized deductions - Personal exemption
Velma's taxable income = $30,000 - $4,000 - $3,950
Velma's taxable income = $22,050

Therefore, the correct answer is D) $22,100.

Eugene and Velma Are Married