Moran, a single taxpayer, pays the following amounts during the current year:
?
$$\begin{array} { l r }
\text { Property taxes on residence } & \$ 1,800 \
\text { State income taxes withheld from paycheck } & 3,000 \
\text { Federal income taxes withhel d from paycheck } & 8,000 \
\text { Mortgage interest on residence } & 6,000 \
\text { Cash contributions to church } & 2,200 \
\text { Credit card interest } & 500
\end{array}$$
If his adjusted gross income is $80,000, what is his taxable income?

Question

Moran, a single taxpayer, pays the following amounts during the current year:
?
$$\begin{array} { l r } 
\text { Property taxes on residence } & \$ 1,800 \
\text { State income taxes withheld from paycheck } & 3,000 \
\text { Federal income taxes withhel d from paycheck } & 8,000 \
\text { Mortgage interest on residence } & 6,000 \
\text { Cash contributions to church } & 2,200 \
\text { Credit card interest } & 500
\end{array}$$
If his adjusted gross income is $80,000, what is his taxable income?

Quizplus · Accepted Answer

To calculate taxable income, we start with the adjusted gross income (AGI) of $80,000 and subtract allowable deductions. Moran can itemize deductions as follows: property taxes ($1,800), state income taxes ($3,000), mortgage interest ($6,000), and charitable contributions ($2,200). These total $13,000. Federal income taxes and credit card interest are not deductible. Subtracting $13,000 from $80,000 gives a taxable income of $67,000.

Moran, a Single Taxpayer, Pays the Following Amounts During the Current