Help Anthony Chavez determine his taxable income based on the following: salary, $49,500; wages, $1,588; $1,250 IRA contribution; $4,898 mortgage interest; $1,112 property tax; $442 charitable contributions. He files head of household and claims two exemptions. (Use Figure 7.2) ### Standard Deductions- **Single taxpayers and married taxpayers filing separately:** $6,300- **Married taxpayers filing jointly:** $12,600- **Head of household:** $9,300---- **Exemption amount:** $4,050 per exemption claimed- **Additional standard deduction for taxpayers who are blind or over age 65:** - $1,250 for married taxpayers - $1,550 for unmarried taxpayers

Taxable Income The Internal Revenue Service (IRS) imposes the federal income tax in the United States on the net earnings of people, businesses, charities, and other corporate persons. All sources of income that contribute to a taxpayer's taxable income, such as earnings, royalties, bonuses, incentives, gifts, capital gain, and certain categories of dividends and capital gains, are subject to federal income taxes.Determination of Taxable Income Description Amount ($) Amount ($) Gross Salaries and Wages ($49500+1588) 51088 Less: IRA Deductions 1250 Adjsuted Gross Income (AGI) 49838 Standard Deductions - Head of Household 9300 Itemized Deduction ($4898+$1112+$442) 6452 Standard / Itemized Deduction which ever is higher 9300 Taxable Income 40538

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Help Anthony Chavez determine his taxable income based on the following: salary, $49,500; wages, $1,588; $1,250 IRA contribution; $4,898 mortgage interest; $1,112 property tax; $442 charitable contributions. He files head of household and claims two exemptions. (Use Figure 7.2)

Help Anthony Chavez determine his taxable income based on the following: salary, $49,500; wages, $1,588; $1,250 IRA contribution; $4,898 mortgage interest; $1,112 property tax; $442 charitable contributions. He files head of household and claims two exemptions. (Use Figure 7.2)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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