Calculate the workers adjusted gross income-taxable income

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Reference no: EM131870584

In 2016, a single worker had gross income of $40,000. She made a $5,000 contribution to a tax-deferred retirement plan offered by her employer. She can claim one personal exemption for herself, and has the following deductible payments: $1,000 in mortgage interest, $1,000 in state income taxes, and $500 in property taxes. Using the federal income tax forms from 2016, answer the following questions.

1. Should the worker itemize deductions, or claim the standard deduction. Why?

2. Calculate the workers' adjusted gross income, taxable income, and regular federal income tax liability. Please show your work

Reference no: EM131870584

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