Jennifer and Jamar are married and live in a home with their 13-year-old dependent son, Oscar. This year, they had the following tax information. $\begin{array}{llr}
\text { Jamar's salary} &\$60,000\
\text { Jennifer's Qualified Business Income from sole } &95,000\
\text { proprietorship} &\
\text { Dividend income} &2,800\
\text {Deduction for self-employment tax } &6,712\
\text { Itemized deductions } &19,200\
\end{array}$
Compute adjusted gross income (AGI) and taxable income.

Question

Jennifer and Jamar are married and live in a home with their 13-year-old dependent son, Oscar. This year, they had the following tax information. $\begin{array}{llr}
  \text {  Jamar's salary} &\$60,000\
 \text { Jennifer's Qualified Business Income from sole } &95,000\
 \text {  proprietorship} &\
 \text {  Dividend income} &2,800\
 \text {Deduction for self-employment tax  } &6,712\
 \text { Itemized deductions } &19,200\
\end{array}$
 Compute adjusted gross income (AGI) and taxable income.

Quizplus · Accepted Answer

AGI is calculated by adding Jamar's salary ($60,000), Jennifer's Qualified Business Income ($95,000), and dividend income ($2,800), then subtracting the deduction for self-employment tax ($6,712). This results in $151,088. Taxable income is calculated by subtracting the standard deduction for a married couple filing jointly in 2023 ($27,700) from the AGI, resulting in $123,388. However, since they have higher itemized deductions ($19,200), we subtract this from the AGI instead, resulting in $131,888 as taxable income, which seems to be a discrepancy in the provided choices, indicating a need for clarification or correction in the calculation or the choices provided.

Jennifer and Jamar Are Married and Live in a Home