Bianca and Dave are a married couple filing a joint tax return. They have a combined gross income of $81,031 and claim four exemptions. They can make an adjustment of $2,914 for business expenses, an adjustment of $1,939 for business losses, a deduction of $4,140 for medical expenses, an adjustment of $4,825 for contributions to their retirement fund, and a deduction of $2,420 for charitable donations. If exemptions are worth $3,650 apiece and the standard deduction for a joint return is $8,350, what is their total taxable income?
Subtract the adjustments from gross income: $81,031 − $2,914 − $1,939 − $4,825 = $71,353. Their medical and charitable deductions total $6,560, which is less than the $8,350 standard deduction, so use the standard deduction. Four exemptions are worth 4 × $3,650 = $14,600. Their taxable income is $71,353 − $8,350 − $14,600 = $48,403, choice C.
AI-written and checked against the verified answer.