Question

Multiple choice question (Focus on Personal Finance - 180 Day Option, 5th Edition)

Sam and Diane are completing their federal income taxes for the year and have identified the amounts listed here. How much can they rightfully deduct?

• AGI: $80,000
• Medical and dental expenses: $9,000
• State income taxes: $3,500
• Mortgage interest: $9,500
• Charitable contributions: $1,000

		$14,000
		$15,000
		$20,000
		$23,000.

Answer 1

Deductions = Medical & dental in excess of 7.5% of AGI + State income tax + Mortgage interest

+ Charitable contributions

= [$9,000 - {$80,000 * .075}] + $3,500 + $9,500 + $1,000 = $17,000