Information for 5-9:

Your gross salary is $70,000 from your job. You also have dividend income of $1,000 and interest income of $300.

You contributed $20,500 to your 401(k) account.

Your itemized deduction is $13,950 and your standard deduction is $12,950.

5. What's your gross income?

a. $70,300

b. $70,400

c. $71,000

d. $71,300

6. Your contribution to your 401(k) is an adjustment to your gross income, for tax purpose.

True

False

7. Whats your adjusted gross income (AGI)?

a. $50,500

b. $50,800

c. $57,350

d. $57,350

8. To lower your taxable income, it is better to take the standard deduction than the itemized deduction.

True

False

9. What's your taxable income?

a. $36,850

b. $37,850

c. $57,350

d. $58,350