Question

Tax Year 2019

This year Jack intends to file a married-joint return. Jack received $173,400 of salary and paid $8,600 of interest on loans used to pay qualified tuition costs for his dependent daughter, Deb. This year Jack has also paid moving expenses of $4,550 and $30,055 of alimony to his ex-wife, Diane, who divorced him in 2012. (Do not round intermediate calculations and round your final answer to the nearest whole dollar amount.)

a. What is Jack’s adjusted gross income?

     

     

Answer 1

Answer -

Here,

Jack intended to file a joint-married return

Jack's income and expenses are as follows :

Income		Expenses
Salary	$173400	Interest on loan for qualified tuition cost	$8600
		Moving expense	$4550
		Alimony expense	$30055

Adjusted Gross Income (AGI) : AGI is a measure of income calculated from your gross income and used to determine how

much of your income is taxable.

Jack's adjusted gross income is $143345

Calculation :

Here,

School fees, tuition fees, and student loan interest expense are deductible for AGI but limitation applied here

Income phaseout begins at $135,000 for taxpayers filing joint returns and deduction is eliminated at $165,000 for taxpayers

filing joint returns (For 2018).

Moving expenses deductible for AGI only if you're in the armed forced.

So, loan interest expense for qualified tuition cost $8600 and moving expense are not deductible for AGI. Because Jack has salary income $173400 more than income phaseout limit.

Therefore,

Gross income - Alimony expense = AGI for Jack

$173400 - $30055 = $143345