Question

This year Evan graduated from college and took a job as a deliveryman in the city. Evan was paid a salary of $68,500 and he received $700 in hourly pay for part-time work over the weekends. Evan summarized his expenses below: Cost of moving his possessions to the city (125 miles away) Interest paid on accumulated student loans Cost of purchasing a delivery uniform Contribution to State University deliveryman program $1,200 2,840 1,440 1,320 Calculate Evan's AGI and taxable income if he files single. Assume that interest payments were initially required on Evan's student loans this year Evan's AGI Taxable income

Answer 1

3.The uniform would qualify as an employee business deduction, but would be reduced by the 2% floor on miscellaneous itemized deductions (by 2% of $66,000 = $1,320). The charitable contribution would be deductible as an itemized deduction, but Evan would choose his standard deduction instead of itemizing (because thestandard deduction ($6,300) exceeds the sum of his itemized deductions ($1,380 = $80 employee business expense after the 2% floor + $1,300 charitable contributions)

ANSWER: AGI =$66000 AND TAXABLE INCOME IS $54000