Julie, an unmarried individual, lives in a home with her 13-year-old dependent son, Oscar. This year, Julie had the following tax information. Compute Julie's adjusted gross income (AGI) and taxable income.

Question

Julie, an unmarried individual, lives in a home with her 13-year-old dependent son, Oscar. This year, Julie had the following tax information.  Compute Julie's adjusted gross income (AGI) and taxable income.

Quizplus · Accepted Answer

To calculate Julie's AGI, we need to add up all her income and subtract any adjustments to income.

Julie's income sources: 
Salary = $95,000 
Interest income = $2,000 
Capital gains = $10,000 
Alimony received = $1,800 
Real estate rental income = $12,000

Adjustments to income:
Julie's contribution to her traditional IRA = $3,800

So, Julie's AGI = ($95,000 + $2,000 + $10,000 + $1,800 + $12,000) - $3,800 = $118,000

To calculate Julie's taxable income, we need to subtract her deductions from her AGI.

Julie's deductions: 
Standard deduction for head of household = $18,650 
Personal exemption for herself = $0 (exemptions have been suspended) 
Personal exemption for Oscar = $0 (same as above)

So, Julie's taxable income = $118,000 - $18,650 = $101,350

Therefore, the correct answer is C.

Julie, an Unmarried Individual, Lives in a Home with Her