Question

This year Evan graduated from college and took a job as a deliveryman in the city. Evan was paid a salary of $75,300 and he received $700 in hourly pay for part-time work over the weekends. Evan summarized his expenses as follows: Cost of moving his possessions to the city (125 miles away) $ 1,200 Interest paid on accumulated student loans 2,900 Cost of purchasing a delivery uniform 1,500 Contribution to State University deliveryman program 1,350 Calculate Evan's AGI and taxable income if he files single. Assume that interest payments were initially required on Evan’s student loans this yea

Answer 1

Answer:

Evan's AGI is $ 66,000 and his taxable income is $ 54,000

Explanation:

To calculate the AGI you have to perform the following:

Salary                                                                                                 $ 67,300

work hourly pay                                                                                     $ 700

Gross pay                                                                                             $68,000

Modified AGI                                                                                       $ 68,000

Student loan interest deduction (2500)-((68000-65000)×(2500/15000)) =                                                    $-2000

AGI                                                                                                          $66,000

Next, to calculate the taxable income you have the follwong substraction

AGI                            $ 66,000

Standard deduction   $12,000

Personal deduction         0        

Taxable Income         $ 54,000