12. Carson, age 34 and single, is an electrical engineer employed by Summit Corponation. Carson's annual salary is $84,000. Summit Corporation's qualified pension plan matches the employee's contributions to the plan up to 5% of the employee's annual salary. During the current year, Carson contributes the $4,200 maximum to the plan, which is matched by Summit. Because of the high cost of medical insurance, the comporation does not provide any medical insurance to its employees. Instead, it offers a flexible benefits plan that employees can use to pay for medical insurance, unreimbursed medical costs, and child-care costs. Carson elects to have $2,500 paid into the plan. Carson uses the plan to purchase medical insurance costing $2,100. Carson spends an additional $650 from the plan on eyeglasses and dental costs. Carson has asked you to prepare his tax return. Your initial interview with him diseloses that he has $1,050 of allowable deductions for adjusted gross income and $3,700 of allowable itemized deductions. Compute Carson's taxable income 12. Carson, age 34 and single, is an electrical engineer employed by Summit Corponation. Carson's annual salary is $84,000. Summit Corporation's qualified pension plan matches the employee's contributions to the plan up to 5% of the employee's annual salary. During the current year, Carson contributes the $4,200 maximum to the plan, which is matched by Summit. Because of the high cost of medical insurance, the comporation does not provide any medical insurance to its employees. Instead, it offers a flexible benefits plan that employees can use to pay for medical insurance, unreimbursed medical costs, and child-care costs. Carson elects to have $2,500 paid into the plan. Carson uses the plan to purchase medical insurance costing $2,100. Carson spends an additional $650 from the plan on eyeglasses and dental costs. Carson has asked you to prepare his tax return. Your initial interview with him diseloses that he has $1,050 of allowable deductions for adjusted gross income and $3,700 of allowable itemized deductions. Compute Carson's taxable income