Charles is a single person,age 35,with no dependents.In 2015,Charles has gross income of $75,000 from his sole proprietorship.Charles also incurs $80,000 of deductible business expenses in connection with his proprietorship.He has interest and dividend income of $22,000.Charles has no itemized deductions.Charles's taxable income is
A)$6,700.
B)$10,700.
C)$13,000.
D)$17,000.

Question

Quizplus · Accepted Answer

To calculate Charles's taxable income, we need to first calculate his gross income and deductions:

Gross income = $75,000 + $22,000 = $97,000
Deductions = $80,000 (business expenses)

Taxable income = Gross Income - Deductions
Taxable income = $97,000 - $80,000 = $17,000

However, since Charles has no itemized deductions, his standard deduction for 2015 is $6,300. This means that his taxable income is actually:

Taxable income = $17,000 - $6,300 (standard deduction) = $10,700

Therefore, the correct answer is A) $6,700.

Charles Is a Single Person,age 35,with No Dependents