Marsha is single,had gross income of $50,000,and incurred the following expenses:
Charitable contribution
$2,000
Taxes and interest on home
7,000
Legal fees incurred in a tax dispute
1,000
Medical expenses
3,000
Penalty on early withdrawal of savings
250

Her AGI is:

Question

Marsha is single,had gross income of $50,000,and incurred the following expenses:
Charitable contribution
$2,000
Taxes and interest on home
7,000
Legal fees incurred in a tax dispute
1,000
Medical expenses
3,000
Penalty on early withdrawal of savings
250
​
Her AGI is:

Quizplus · Accepted Answer

To find Marsha's AGI, we need to subtract her deductions from her gross income. Marsha qualifies for the following deductions:
- Charitable contribution: $2,000
- Taxes and interest on home: $7,000
- Legal fees incurred in a tax dispute: $1,000
- Medical expenses: $3,000 (since it exceeds 7.5% of her adjusted gross income)

Her total deductions add up to $13,000, which when subtracted from her gross income of $50,000, gives an AGI of $37,000. However, she also incurred a penalty on early withdrawal of savings of $250, which can be subtracted from her AGI, giving a final AGI of $49,750. Thus, the correct answer is B.

Marsha Is Single,had Gross Income of $50,000,and Incurred the Following