Question

Compute 2018 taxable income in each of the following independent situations.

Answer 1

Answer:

a. Drew and Meg are married and filing a married joint return. The standard deduction of a married joint return is $24,400 but it is lower

AGI                                       $125,000

Less: Itemized deduction   $27,000

Taxable income                  $98,000

b. Sybil's filing status is head of household. The Standard deduction for head of household is $18,000 in 2018 which is higher than itemized deductions of $8,000.

AGI                                       $80,000

Less: Itemized deduction   $18,000

Taxable income                  $62,000

c. Scott is a surviving spouse. The standard deduction will be equal to that of married filling joint return which is $24,400

AGI                                       $75,000

Less: Itemized deduction   $24,400

Taxable income                  $50,600

d. Amelia is an abandoned spouse. She can file as head of household. The standard deduction for the year 2018 is $18,000 which is higher than  itemized deductions of $10,650.

AGI                                       $58,000

Less: Itemized deduction   $18,000

Taxable income                  $40,000

e. Dale is divorced and filing status is head of household. The standard deduction for the year 2018 is $18,000 which is higher than  itemized deductions of $9,900

AGI                                       $64,000

Less: Itemized deduction   $18,000

Taxable income                  $46,000