Question

Gretchen made $56,750 last year. She paid $1,200 in student loan interest and made a $3,000 contribution to her IRA. On her federal tax return, she will claim $4,200 to be the amount of her:
a. Standard deduction
b. Taxable Income
c. AGI
d. Adjustments

Answer 1

d. Adjustments

Studen loan interests and IRA contributions are deductions found under the heading of ADJUSTMENTS TO INCOME to compute for the Adjusted Gross Income or AGI.

Standard deductions are those based on the filing status of the individual and not his total itemized deductions. Regardless of the actual expenses incurred by an individual, he can claim a standar deduction if he is single, head of household, married filing separately, married filing jointly, qualifying widow(er). at the time he files for his federal tax return.

taxable income is the income left from all the necessary deductions.

For example: Gretchen's income =>                 $56,750
   less: Adjustments to income
             student loan interest $1,200
             IRA Contribution            3,000                  -  4,200
                                                                               ===========
Taxable income                                                    $52,550

Answer 2

Answer:

C: AGI

Step-by-step explanation: