GROSS INCOME Salaries $95,000$ Rent income $5,000$ TOTAL $100,000$ ABOVE THE LINE DEDUCTIONS Interest paid on Edu. Loan. $2,500$ Retirement expenses $5,500$ Apartment Expenses $2,000$ TOTAL $10,000$ ADJUSTED GROSS INCOME $90,000$ STANDARD DEDUCTION OR ITEMIZED DEDUCTIONS? $63($c$)(2)($A$)($i$)=$ Standard Deduction amount is $$24,000$ in this case If the Itemized Deductions exceed this amount, taxpayers should itemize But note $67($a$)$: miscellaneous itemized deductions are disallowed through $2025$; So we have to categorize the itemized deductions! REGULAR ITEMIZED DEDUCTIONS $[$taken in full; identified in $67($b$)]$ Medical Exp. $2,000$ Mortgage Int. $16,000$ Charity Contrib. $50018,500$ Since the allowable itemized deductions $($$$18,500)$ do not exceed the standard deduction $($$$24,000),$ A&B will probably elect the standard deduction. Putting it all together: Gross Income $100,000$ Above the line $(10,000)$ AGI $90,000$ Standard Deduction $(25,900)$ TAXABLE INCOME $64,100$