Eugene and Velma are married. For 2019, Eugene earned $25,000 and Velma earned $30,000. They have decided to file separate returns. They have no deductions for adjusted gross income. Eugene's itemized deductions are $14,200 and Velma's are $4,000. Assuming Eugene and Velma do not live in a community property state and Eugene deducts the greater of the standard deduction or itemized deductions, what is Eugene's taxable income?

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Quizplus · Accepted Answer

Eugene's taxable income is calculated by subtracting the greater of his standard deduction or itemized deductions from his gross income. For 2019, the standard deduction for a single filer was $12,200. Since Eugene's itemized deductions of $14,200 are greater than the standard deduction, he would use the itemized deductions. Therefore, his taxable income is $25,000 (gross income) - $14,200 (itemized deductions) = $10,800.

Eugene and Velma Are Married