To determine the gross income, adjusted gross income (AGI), and taxable income of the taxpayer, we can follow these steps:
Step 1: Calculate Gross Income
Gross income includes all income received by the taxpayer that is not specifically excluded from taxation.
- Wages: $200,700
- Interest: $1,700
Gross Income Calculation: \[ \text{Gross Income} = \text{Wages} + \text{Interest} = 200,700 + 1,700 = 202,400 \]
Step 2: Calculate Adjusted Gross Income (AGI)
AGI is calculated by taking the gross income and subtracting any contributions to tax-deferred retirement plans and other adjustments.
- Tax-deferred retirement plan contribution: $19,900
AGI Calculation: \[ \text{AGI} = \text{Gross Income} - \text{Tax-deferred retirement plan contribution} \] \[ \text{AGI} = 202,400 - 19,900 = 182,500 \]
Step 3: Calculate Taxable Income
Taxable income is calculated by taking the AGI and subtracting either the standard deduction or itemized deductions, whichever is greater.
- Itemized deductions: $23,500
- Standard deduction for single filers (2023): $12,550
Since the itemized deductions ($23,500) are greater than the standard deduction ($12,550), we will use the itemized deductions.
Taxable Income Calculation: \[ \text{Taxable Income} = \text{AGI} - \text{Itemized Deductions} \] \[ \text{Taxable Income} = 182,500 - 23,500 = 159,000 \]
Summary of Results
- Gross Income: $202,400
- Adjusted Gross Income (AGI): $182,500
- Taxable Income: $159,000
These are the final figures for the taxpayer’s gross income, adjusted gross income, and taxable income based on the provided details.
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