$*****$

Scenario $2$: Combining Multiple Income Types

Michael has the following income:

Wages: $$35,000$

Long$-$term capital gains: $$20,000$

Qualified dividends: $$6,000$

Schedule C Business Income $($sole proprietorship$)$: $$32,000$

Itemized Deductions: $$16,000$

Allowable deduction for self$-$employment tax $($calculate based on business income$)$

Calculate:

AGI, Taxable Income, and Total Tax Liability