Question

Wally, single and age 42, has the following items of income and expense for the current tax year (2019). • Wages: $60,000. Interest: $1,000 Inheritance: $50,000 • Alimony paid: $10,000 (2016 divorce decree). Child support paid: $8,000 Federal taxes paid: $5,000 State taxes paid: $2,000 • Medical expenses: $7,500 What is his taxable income? 18

Answer 1

Wages		$60,000.00
Interest		$1,000.00
Gross Income		$61,000.00
Less: Alimony Paid		-$10,000.00
AGI		$51,000.00

Explanation:

1. Inheritance tax will be paid on the amount of ineritance received.
2. Child support payments are not deductible.
3. Federal taxes and State income taxes are not deductible.
4. Medical expenses are not deductible since the age of taxpayer is not equal to or above 65 years.