Problem Description:
The image provided is a
Form 1040EZ for the year 2016, which is used by single filers and joint filers with no dependents. The task is to calculate the
taxable income based on the information filled in the form.
Key Sections of the Form:
1.
Income:
- Line 1: Wages, salaries, and tips = $98,374
- Line 2: Taxable interest = $354
- Line 3: Unemployment compensation and Alaska Permanent Fund dividends = $0
2.
Adjusted Gross Income (AGI):
- Line 4: Sum of lines 1, 2, and 3 = $98,728
3.
Exemptions:
- Line 5: Standard deduction for married filing jointly = $20,700
4.
Taxable Income:
- Line 6: Subtract line 5 from line 4. If line 5 is larger than line 4, enter -$0.
Solution Explanation:
#### Step 1: Calculate Adjusted Gross Income (AGI)
The AGI is calculated by summing up all sources of income listed in lines 1, 2, and 3:
\[
\text{AGI} = \text{Line 1} + \text{Line 2} + \text{Line 3}
\]
\[
\text{AGI} = 98,374 + 354 + 0 = 98,728
\]
So,
Line 4 (AGI) is
$98,728.
#### Step 2: Determine the Standard Deduction
For married filing jointly in 2016, the standard deduction is
$20,700. This value is entered in
Line 5.
#### Step 3: Calculate Taxable Income
Taxable income is calculated by subtracting the standard deduction (Line 5) from the AGI (Line 4):
\[
\text{Taxable Income} = \text{Line 4} - \text{Line 5}
\]
\[
\text{Taxable Income} = 98,728 - 20,700 = 78,028
\]
So,
Line 6 (Taxable Income) is
$78,028.
Final Answer:
The taxable income is:
\[
\boxed{78028}
\]
Parent Tip: Review the logic above to help your child master the concept of 1040ez line 5 worksheet.
