Mike has an adjusted gross income of $85,643. He claims two exemptions and can deduct $896 for state income tax, $2,145 for charitable donations, and $3,473 for medical expenses. If the standard deduction is $5,700 and exemptions are each worth $3,650, what is Mike’s total taxable income?

Add the listed itemized deductions: $896 + $2,145 + $3,473 = $6,514, which is more than the $5,700 standard deduction. Mike’s two exemptions total 2 × $3,650 = $7,300. Subtract both deductions from his adjusted gross income: $85,643 − $6,514 − $7,300 = $71,829, so his taxable income is $71,829 (choice C).

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