Determine Bettys taxable income for the year given the following information:

Salary: $78,000

Child care credit: $1,000

Personal and Dependency exemptions: $12,000

Investment interest: $4,000

IRA contribution: $5,500

Municipal bond interest: $500

Federal income taxes withheld: $6,000

Itemized deductions: $15,300

1. $55,200
2. $54,700
3. $49,700
4. $49,200

Please do not copy from Chegg. Only attempt if you are sure about the answer. Solve in a step by step manner, explaining each step.