Question

This year Evan graduated from college and took a job as a deliveryman in the city. Evan was paid a salary of $72,300 and he received $700 in hourly pay for part-time work over the weekends. Evan summarized his expenses as follows: Cost of moving his possessions to the city (125 miles away) $1,200 Interest paid on accumulated student loans 2,800 Cost of purchasing a delivery uniform 1,400 Contribution to State University deliveryman program 1,300 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

Ans: Assume tax year to be 2019

Particulars	Amount($)
Salary	72,300
Part time hourly pay	700
Gross Pay	73,000
Less: Moving expense deduction{ As eliminated from 2018 to 2025}	0
Modified AGI {for student loan interest}**	73,000
Student Loan interest deduction	(2,000)
AGI (Adjusted gross income)	71,000
Standard deduction	(12,200)
Personal exemption	0
Adjusted Gross Income	58,800

Modified AGI = 2,500-{73,000-70,000}*(2500/15,000)

= (2,500-{3,000/6)

=(2,000)

Since standard deduction is greater than itemized deduction then standard deduction has been opted for tax saving scheme