5). Suppose your neighbor earned wages of $275,000, received $1580 in interest from a savings account, and contributed $3800 to a tax-deferred retirement plan. He is entitled to a personal exemption of $4050 and the same exemption for each of his two children. He is also entitled to a standard deduction of $6300. The interest on his home mortgage was $51,235. He contributed $74,000 to charity and he paid $12,760 in state taxes. He has no additional tax credits. Hint: the itemized deduction would include interest paid on home mortgage, contributions to charity, and amount paid in state taxes. Find your neighbor's: a). Gross Income: b). Adjusted Gross Income: c). Taxable Income: