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The following information applies to Jasmine, who is single, for 2017:Salary $56,000Interest income from First Bank of Lexington 1,500Dividends from Watters Company stock 3,000Contribution to a traditional IRA 4,000Loan repayment from her friend 1,000Capital loss from sale of personal vehicle (2,300)Number of potential dependents ?Age 44Jasmine maintains a household for her sister, who has $9,000 from Social Security. In addition, Jasmine's aunt lives with her and has income of $3,000.The personal exemption amount for 2017 is $4,050.Calculate Jasmine's Taxable Income for 2017.

Respuesta :

Answer:

Jasmine's taxable income for the year 2017 is $ 42,050

Explanation:

we are going to do a step wise calculation for taking out the taxable income of Jasmine,

the first step is to take out the gross income of Jasmine,

GROSS INCOME =

Salary + interest income from first bank of Lexington + Dividend income

= $56,000 + $1500 + $ 3000

= $60,500

Next step is to take out adjusted gross income by subtracting contribution to IRA from gross income,

ADJUSTED INCOME =

gross income - contribution to IRA

= $60,500 - $4000

= $56,500

Next step would be to subtract standard deduction ($6350 as of 2017) and personal exemption ( $8100 - $4050 x 2, multiplied by 2 because Jasmine's aunt live with her) from adjusted gross income,

TAXABLE INCOME =

=$56,500 - $ 6350 - $8100

= $ 42,050

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