Question

Kevin, while calculating his tax adjustments, notes that he can make adjustments of $3,435 for contributions to his retirement plan, $3,393 for business losses, and $1,128 for business expenses. If Kevin’s gross income is $45,942, what is his adjusted gross income?
a.
$53,898
b.
$40,242
c.
$41,421
d.
$37,986

Answer 1

Adjusted gross income = gross income − total adjustments.
Total adjustments = 3,435 + 3,393 + 1,128 = 7,956.
AGI = 45,942 − 7,956 = 37,986.

Answer: d. $37,986