Question

@KonradZuse
Jeffrey earned a gross income of $78,350 last year. He made $2,489.78 in student loan interest deductions, donated $4,294 to his favorite charities and paid $3,571.32 in home mortgage interest. Jeffrey claims a standard deduction of $11,400 for himself and his non-working spouse. If their exemption is $7,300, what is their taxable income?

Answer 1

this is when you aren't supposed to confuse students... I have no idea what half of this tax poop means LOL....

Answer 2

lol^

Answer 3

@jim_thompson5910 do you understand taxes....? LOL

Answer 4

thanks guys

Answer 5

Hint: Normally you would tax all of your income...BUT...deductions allow you to spare some of your income from being taxed

It turns out that student loan interest payments, charitable donations, and mortage interest payments all count as deductions

ie, if you earn $100 and you claim $10 total in deductions, then only $90 is considered taxable income (ie $90 is applied to find the tax you owe)

Answer 6

So what you do is add up all of your deductions, then subtract them from your gross income

That will be your taxable income

Answer 7

thanks=D

Answer 8

what is the 7300 business? excemption? If he claims 11,400.... Im soo confused, and my family does deductions all the time.... :'(..

Answer 9

I think I'm going to afk cuz my brain doesnt' want to do math today :p

Answer 10

66950?

Answer 11

I think those extra numbers are also deductions, but I'm not 100% sure

Answer 12

This is why math half of the time SUCKS... You cannot even do the problem because you cannot understand it.....

Answer 13

Give me math, not words... Words and Math DO NOT get along...

Answer 14

the exception is what is messing me up?

Answer 15

yeah I'm reading that tax exemptions are a lot like deductions, just have fewer restrictions

Answer 16

dont forget your advice Math is a mind game, conquer it and you can take on the world!

Answer 17

But words != math so I give up :p.

Answer 18

Ask Jim about stats and I.... We never got along....

Answer 19

when it says "Jeffrey claims a standard deduction of $11,400 for himself and his non-working spouse" I'm not sure which deductions they're talking about, but I'm assuming that you can also include 11400 in the list of deductions


also it says "If their exemption is $7,300", so I'm assuming 7300 is also thrown in the list of deductions

Answer 20

$49,294.40

$53,588.90

$57,160.22

$60,694.90
these are the choices//....

Answer 21

hmm I'm close, but off by a few cents

Answer 22

so would it be 60,694?

Answer 23

This is what I get

Add up all the deductions: 2489.78+4294+3571.32+11400+7300 = 29055.10

Then subtract the deductions from the gross income: 78350 - 29055.10 = 49294.90

But I'm off by 50 cents, so idk why that is

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When I leave out the amount of $11400, I get this total deduction: $17655.10

Which gives the taxable income to be 78350 - 17655.10 = 60,694.90

Which is exact, but it seems odd why this amount is left off

Answer 24

ok i guess ill go with 60 sense we both got that

Answer 25

$3,571.32 in home mortgage interest. Is that even deductable..?

Answer 26

yes, home mortgage interest is deductible

Answer 27

gross income - 78,350

student loan interest deductions - 2489.78
charity (non taxable) - 4294
mortgage interest (non taxable) - 3571.32
deduction - 11,400
tax exempt - 7300

add non taxable : 2489.78 + 4294 + 3571.32 + 11,400 + 7300 =
29,055.10

78,350 - 29,055.10 = 49294.90 <---taxable income

Answer 28

http://en.wikipedia.org/wiki/Home_mortgage_interest_deduction

Answer 29

yeah I tried to add everything up but that one, at got like 52k :p

Answer 30

It is the first answer....49,294.90 :)

Answer 31

Tell your professor the answer is none of the above and explain why, then get those extra credit points :).

Answer 32

The answer is there....its the first one

Answer 33

THanks Everyone for your help=D you guys are all great=D

Answer 34

texaschic101, its close to the first one, but it's off by 50 cents

Answer 35

You got 49,294.90
first answer is actually 49,294.40

Answer 36

Like I said tell your professor what's up... It's probably a book issue... I know in college a lot of the professors said the book answers are given by the students and could be wrong.. LOL

Answer 37

oops...your right....I don't see where I messed up..

Answer 38

Good job fail book professors....

Answer 39

you didn't mess up because I got the same thing (and I double-checked everything)

Answer 40

lol you're probably right KonradZuse, there's probably a typo somewhere

Answer 41

I feel better now :)

Answer 42

i chose $60,694.90 and it was wrong.