Question

In: Accounting

The following represent elements of the tax formula for individual taxpayers: A. Income from any source...

The following represent elements of the tax formula for individual taxpayers: A. Income from any source B. Itemized deductions C. Deductions for AGI D. Exclusions from gross income E. Standard deduction amount Which of the above are subtracted from AGI in the computation of taxable income?

1) B,D, and E
2) B,C, and E
3) B or E
4) C and E or B and C

Expert Solution

Items subtracted from adjusted gross income is as follows :-

1. Itemized deductions

2. Deductions for adjusted gross income

3. Standard deduction amount

1. Itemized deductions :- deduction allowed towards particular item like a specific loss or specific expenditure.

This allowed on adjusted gross income.

2. Deductions for adjusted gross income

In the name itself we came to know that these deductions are allowed aganist adjusted gross income.

3. Standard deduction amount

This deduction is deducted before computation of taxable income .

The taxable income is computed after computation of adjusted gross income. Then the standard deduction is allowed aganist adjusted gross income only .

So these 3 deductions are allowed aganist adjusted gross income.

The answer is option 2 that is B,C and E

These are all the information required to solve the given question.

I hope, all the above mentioned explanations and information are useful and helpful to you.

Thank you.

ekkarill92 answered 2 years ago

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