Question

Fan & Medal.
Jeffrey earned a gross income of $51,280 last year. He made $1,746.83 in student loan interest deductions, donated $2,914 to his favorite charities and paid $3,941.47 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?
A. $26,891.70
B. $23,977.70
C. $35,377.70
D. $30.833.17

Answer 1

what have u done so far?

Answer 2

I don't know what to do.

Answer 3

I'm re-reading this

Answer 4

Do I subtract the amounts listed? I did that and got B.

Answer 5

$51,280-$1,746.83-$2,914-$3,941.47 -$11,400-$7,300

Answer 6

srry! I got logged out

Answer 7

Okay, no problem lol. Is that how I solve this problem though? It seems too easy lol.

Answer 8

hmh. let me see

Answer 9

were's the answer you got?

Answer 10

I get $23,977.70.

Answer 11

Jeffrey claims a standard deduction of $11,400 for himself and his non-working spouse.

He took the standard deduction and did not itemize.

His loan interest and charity contributions will not be subtracted from his gross income because of that.

Answer 12

So that would give me 28,638.53 but that's not an answer?

Answer 13

51,280 - 11,400 - 7,300 =

is what I think for his adjusted gross income.

Answer 14

yes,but you must do another step

Answer 15

which will give what?

Answer 16

That's 32,580.
My answer choices are
A. $26,891.70
B. $23,977.70
C. $35,377.70
D. $30.833.17

Answer 17

I don't know what that is not correct. I need to look on the IRS site to see if any "special" costs can also be deducted from the gross income when the standard deduction is taken.

Answer 18

Does anybody know if student loan interest is directly subtracted from the gross income even if a person takes the standard deduction and does not itemize.

If so,

51,280 - 11,400 - 7,300 -1746= very close to D. $30.833.17

That may just be happenstance so don't view it as an answer.

Answer 19

"You might be paying back loans you took to finance higher education. If so, you could qualify to deduct up to $2,500 of interest per return per year. You can claim the student-loan interest deduction as an adjustment to income. You don't need to itemize deductions to claim it."

From H&R Block website

I think that the student loan interest is subtracted from the gross income even though Jeff took the standard deduction.

Answer 20

I am sticking with this as my best idea of an answer based on the above information.

51,280 - 11,400 - 7,300 -1746= very close to D. $30.833.17

@leozap1

Answer 21

I forgot to subtract the $.83 of the loan.

Now an answer match is possible.

51,280 - 11,400 - 7,300 -1746.83= $30.833.17

Answer 22

Okay, thank you! I will let you know if it was the right answer is when I find out. :)

Answer 23

D was the correct answer, thank you! :D

Answer 24

You are welcome. I learned about student loan deductions from reading about this problem.