Answer Happy

Essay-8 points Grace, age 25, is single and has no dependents. She is a high school teacher and earned a $30,000 salary in the current year. Her other income consisted of a $1,000 prize won in a sweepstakes contest and $500 interest on tax exempt municipal bonds she received as a graduation gift in 2018. She also took out a $4,000 loan to pay for a vacation. Her itemized deductions are: $1,000 unreimbursed medical expenses, $1,000 Pennsylvania state income tax, $3,500 mortgage interest on her primary residence, $900 charitable contributions to 501(c)(3) organizations, and $200 in union dues. Compute Grace's taxable income for the year using the tax formula provided below.
standard deduction amounts are provided) Fill in the lines above with the appropriate dollar Instructions: Use the formula below to calculate taxable income (The 20XX exemption and amounts. Also, show your work for the itemized deduction calculation in the space provided. Tax Formula for Individuals Your Answer Income (broadly conceived) Less: Exclusions Example $xxxxxxx Gross income (x,xxXxXxx) $xx.xxx Less: Deductions for adjusted gross income Adjusted gross income 89 (x,xxxx) $xx.xxx Less: The greater of Total itemized deductions or standard deduction (see next page) (xxxxxx) Taxable income $xxxxxxx Write out (make a list and show the math) the calculation of itemized deduction below. failure to identify all itemized deductions (even if they do not exceed the threshold amount), will result in the loss of points: (hint remember sometimes the AGI acts as a gatekeeper and does not allow all the expense to be allowed) Amount of medical (1pt) allowed on schedule A = Amount of state taxes (1 pt) allowed on schedule A = Amount of mortgage interest (1pt) allowed on schedule A = Amount of charitable contributions (1 pt) allowed on schedule A= Total Schedule A (whether or not it is used) = 20XX Standard Deduction Table: If your filing status is... Your standard deduction is: Single or married filing separately Married filing jointly $12.550 $25,100 10