Sally's adjusted gross income is $38,000. She does not own a home, but has charitable contributions of $1,500 and interest on her car loan of $2,100. This year she also had medical expenses of $2,000

She is allowed a standard deduction of $6300 and one personal exemption of $4,000. What is Sally's taxable income?
A) $38,000
B) $31,300
C) $27,700
D) $29,200


Answer: C
Explanation: C)
Adjusted gross income $38,000
Standard deduction $5,950 (exceeds itemized deductions of $1,500)
Minus personal exemption $3,800
Taxable income $28,250

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