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 compute Julie's AGI, we start with her total income of $125,000 and subtract her above-the-line deductions of $7,000 (for her contribution to an IRA). Therefore, her AGI is $118,000 ($125,000 - $7,000).

To calculate Julie's taxable income, we subtract her standard deduction of $12,400 and her personal exemption of $4,300 (for herself and her dependent son). This gives us a taxable income of $100,750 ($118,000 - $12,400 - $4,300). Therefore, the correct choice is C.

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