Problem 1-5 The Tax Formula for Individuals, Filing Status and Tax Computation, The Standard Deduction (LO 1.3, 1.5, 1.7)

Diego, age 28, married Dolores, age 27, in 2018. Their salaries for the year amounted to $47,230 and they had interest income of $3,500. Diego and Dolores' deductions for adjusted gross income amounted to $2,000; their itemized deductions were $16,000, and they have no dependents.

Table for the standard deduction

Filing Status	2018 Standard Deduction
Single	$ 12,000
Married, filing jointly	24,000
Married, filing separately	12,000
Head of household	18,000
Qualifying widow(er)	24,000

a. What is the amount of their adjusted gross income? $ _____

b. In order to minimize taxable income, Diego and Dolores will take the standard deduction in the amount of $ _____

c. What is the amount of their taxable income? $ _____

d. What is their tax liability for 2018? $ _____