Compute the gross income, adjusted gross income, and taxable income in the following situation. Use the exemptions and deductions in the table to the right. Explain how it was decided whether to itemize deductions or use the standard deduction. Sara is married, but she and her husband filed separately. Her salary was $60,700, and she earned $330 in interest. She had $1970 in itemized deductions and claimed three exemptions, for herself and two children. Tax Rate Married Filing Separately up to $9325 up to $37,950 10% 15% 25% up to $76,550 28% up to $116,675 33% 35% 39.6% Standard deduction Exemption up to $208,350 up to $235,350 above $235,350 $6350 $4050 (per person)