1) Izzy works for Bee Gone Inc. In 2021, her annual salary is $40,000. In addition to her salary, her employer provides her with the following benefits in 2021: $5,000 of health insurance, $40,000 of group term life insurance, and $2,000 of child and dependent care services. Her employer also provides her with meals on Saturdays on the business premises to limit the time she is away from the front desk during busy times. These yearly value of these meals is $500. Izzy contributes $2,000 in 2021 towards a traditional IRA. Izzy files taxes as single. Her itemized deductions are $3,000 and the standard deduction for single filing status in 2021 is $12,550. What is Izzy's taxable income for 2021?

2) Ray owns a Chocolate store as a sole proprietor. In 2021, sales revenue equaled $100,000. The business had the following expenses in 2021: $2,000 of advertising, $15,000 of supplies, and $1,500 of insurance. Ray also incurred the following expenses related to the bakery. He traveled to a bakery convention strictly for business purposes. He spent $500 on airfare, $200 on hotels, and $300 on meals. He also incurred $400 of expenses related to entertaining clients of the bakery and a $100 fine for not paying his taxes on time. What is Ray's adjusted gross income for 2021?

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Question 1 Step 1 Taxable income refers to the sum value of money earned or gained by an individual ... View the full answer