Answer:
1. Gross income = $34,600
2. Adjusted gross income = $31,100
3. Taxable income = $19,960
Explanation:
Given data;
Earned wages = $32,000
Interest received = $2600
Tax contribution = $3500
Personal exemption = $4050
Deductions = $7090
1. Gross income; All earnings before any tax payment or deductions
Gross income = $32,000 + $2600
=$34,600
2. Adjusted gross income:
The adjusted amount from the question is $3500,
Therefore,
Adjusted gross income = Gross income - adjusted amount
= $34,600 - $3500
= $31,100
3. Taxable income: It's calculated using the formula;
Taxable income = adjusted gross income - exemption + deductions
Substituting, we have;
Taxable income = $31,100 - ($4050+ $7090)
= $31,100 - $11,140
=$19,960
