In terms of the tax formula applicable to individual taxpayers, which, if any, of the following statements, is correct?In arriving at AGI, a taxpayer must elect between claiming deductions for AGI and deductions from AGI.In arriving at taxable income, a taxpayer must elect between claiming deductions for AGI and deductions from AGI.If a taxpayer has deductions for AGI, the standard deduction is not available.In arriving at taxable income, a taxpayer must elect between deductions for AGI and the standard deduction.None of these.

Question
Asked Apr 14, 2019
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  1. In terms of the tax formula applicable to individual taxpayers, which, if any, of the following statements, is correct?
  2. In arriving at AGI, a taxpayer must elect between claiming deductions for AGI and deductions from AGI.
  3. In arriving at taxable income, a taxpayer must elect between claiming deductions for AGI and deductions from AGI.
  4. If a taxpayer has deductions for AGI, the standard deduction is not available.
  5. In arriving at taxable income, a taxpayer must elect between deductions for AGI and the standard deduction.
  6. None of these.

 

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Expert Answer

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Deductions for AGI means above the line deduction which a taxpayer can deduct from his gross income to compute his adjusted gross total income. For deductions for AGI, the taxpayer may either use standard deduction or itemised deductions. Examples of deductions of AGI includes the expenses incurred for carrying out business deducted from the revenue.

After computing the adjusted gross total income, the taxpayer may deduct deductions from AGI which means item wise deductions or standard deductions. Example of deductions from AGI include t...

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