Adaire is an unmarried individual who earned a gross income of $107,867 last year. She made $3,944.62 in IRA contributions, donated $2,841 to her favorite charities and paid $2,987.43 in mortgage interest. A standard deduction is $5,700 for an unmarried individual. If Adaire’s exemption is $3,650, what is her taxable income?

Question

anonymous · Answer

Someoneknow how to do this kind of problems?

anonymous · Answer

Hero RE YOU THERE?

hero · Answer

Yes

anonymous · Answer

are you going to help me?

hero · Answer

I think you have to subtract things like ira contributions, donations, mortgage interest, and standard deduction from the income.

anonymous · Answer

I mean i knew that but the whole process of this problem i don't quite comprehend

hero · Answer

$107,867$ 
$ \- 3,944.62 \- 2,841 \- 2,987.43 \- 5,700 \- 3,650\ \text{_______}$
Taxable income

anonymous · Answer

ohhhh..lolXD ok wait let me get the answewr

anonymous · Answer

88743.95? what next?

hero · Answer

@nincompoop, why would you add stuff to your income that are tax deductible?

hero · Answer

@Helly that's your taxable income.

nincompoop · Answer

i said in the end to subtract the sum to the gross income

nincompoop · Answer

the higher the deductions and exemptions the better

hero · Answer

Actually, @Helly, I don't think you can subtract the standard deduction since your other deductions are greater than the standard deduction.

nincompoop · Answer

all of them have certain limits though

anonymous · Answer

there asking for the taxable income not gross.?

anonymous · Answer

These are the answer choices. $94,572.38

$97,431.38

$94,443.95

$88,743.95-----but im not sure about this one...

hero · Answer

I got 94.443.95

hero · Answer

I didn't subtract the standard deduction

anonymous · Answer

So what is the answer then because now im really confuse?

hero · Answer

Well, as I said before, your total deductions were greater than the standard deduction, so you only subtract those rather than subtract the standard deduction.

anonymous · Answer

So 94.443.95 is the answer?

hero · Answer

107867 - 3944.62 - 2841 - 2987.43 - 3650 = 94,443.95

anonymous · Answer

Alright Thanks everyone you all where AWSOME YEAYYAYAYAYYA!!!!lol no but really thnaks=D

nincompoop · Answer

Only use the standard deduction if you're not reporting an itemized deduction.  If one chooses an itemized deduction such as the items you listed they all have to be summed up and be deducted to the annual gross income.  

One benefits from the standard deduction if it is more than the total allowable itemized deductions (no duhh).  This is to confirm what hero said: "you do not include the standard deductions on top of your itemized deductions."

anonymous · Answer

oh sorry did i retype that again.sorry