Find the gross​ income, the adjusted gross​ income, and the taxable income. Base the taxable income on the greater of a standard deduction or an itemized deduction.
The taxpayer is​ single, earned wages of ​$185 comma 100​, received ​$15 comma 500 in taxable income from​ investments, and contributed ​$16 comma 000 to a​ tax-deferred retirement plan. The interest on his home mortgage was ​$9855​, he contributed ​$27 comma 000 to​ charity, and he paid ​$5275 in state taxes.
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Part 1
The gross income is ​$

enter your response here.
​(Simplify your​ answer.)
Part 2
The adjusted gross income is ​$

enter your response here.
​(Simplify your​ answer.)
Part 3
The taxable income is ​$

enter your response here.
​(Simplify your​ answer.)

Let's go step by step to calculate each required value:

### **Part 1: Gross Income**
Gross income is the total of all earned and unearned income before any deductions. 

Here we have:
- Wages: $185,100
- Taxable income from investments: $15,500

Gross income = Wages + Investment income
\[
\text{Gross Income} = 185,100 + 15,500 = 200,600
\]
So, the gross income is **$200,600**.

---

### **Part 2: Adjusted Gross Income (AGI)**
To find the adjusted gross income, we subtract certain adjustments from gross income. In this case, the taxpayer contributed $16,000 to a tax-deferred retirement plan, which reduces the gross income.

AGI = Gross income - Retirement plan contribution
\[
\text{AGI} = 200,600 - 16,000 = 184,600
\]
So, the adjusted gross income is **$184,600**.

---

### **Part 3: Taxable Income**
To find the taxable income, we need to take the greater of the standard deduction or the itemized deductions and subtract it from the AGI.

#### Itemized Deductions:
The taxpayer's itemized deductions include:
- Home mortgage interest: $9,855
- Charity contributions: $27,000
- State taxes paid: $5,275

Total itemized deductions = $9,855 + $27,000 + $5,275 = $42,130

#### Standard Deduction:
For a single taxpayer in 2021, the standard deduction is **$12,550**.

Since the itemized deductions ($42,130) are greater than the standard deduction ($12,550), we use the itemized deductions.

Taxable Income = Adjusted Gross Income - Itemized Deductions
\[
\text{Taxable Income} = 184,600 - 42,130 = 142,470
\]
So, the taxable income is **$142,470**.

---

### Summary:
- **Gross Income**: $200,600
- **Adjusted Gross Income**: $184,600
- **Taxable Income**: $142,470

Would you like more details or have any questions about this calculation?

---

Here are five related questions to explore this topic further:
1. How would the taxable income change if the taxpayer had no tax-deferred retirement plan contributions?
2. How does the marginal tax rate apply to this taxable income?
3. What happens to the taxable income if charity contributions are lower than the standard deduction?
4. How are investment incomes taxed differently from earned wages?
5. How do deductions vary for taxpayers with dependents or filing jointly?

**Tip**: Always check if itemized deductions exceed the standard deduction to maximize your tax savings!

Find the gross income, the adjusted gross income, and the taxable income. Base the taxable income on the greater of a standard deduction or an itemized deduction. The taxpayer is single, earned wages of $185,100, received $15,500 in taxable income from investments, and contributed $16,000 to a tax-deferred retirement plan. The interest on his home mortgage was $9,855, he contributed $27,000 to charity, and he paid $5,275 in state taxes.

Learn how to calculate gross income, adjusted gross income, and taxable income for a single taxpayer with wages of $185,100, investment income of $15,500, and contributions to a tax-deferred retirement plan. Includes details on itemized deductions and the standard deduction for 2021.

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