Discussion - taxpayer’s taxable income Deductions from...

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Discuss the differences in the tax treatment of deductions "For" and deductions "From" Adjusted Gross Income. Which of these do you think would benefit the taxpayer the most? Give examples of each type of deduction (For and From). Above the line are the deductions “For” Adjusted Gross Income allows the taxpayer to claim certain adjustments (business and tax deferred payments such as alimony paid, educator expenses, tuition payments, moving expenses, self employment tax and IRA deductions) reducing the total income. Adjustments for AGI will always lower your taxes. Below the line are deductions “from” Adjusted Gross Income. A taxpayer can either take the standard deduction (amount varies according to filing status) or itemize their deductions (charity, mortgage interest, medical expenses, taxes paid, interest, misc. expenses, and un-reimbursable employment expenses) whichever is greater. This deduction along with the credit for exemptions reduces the
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Unformatted text preview: taxpayer’s taxable income. Deductions from AGI will lower your taxes if the deductions are greater than the standard deduction amount. There are benefits to both “for” and “from” adjustments. The person who owns their own business may have more adjustments (for) reducing their AGI. However, a person who keeps track of their expenses may benefit from the deductions “from” AGI by itemizing. Hello Argenia, my original thought was both having benefits to the taxpayer; however, after reading your post it does make sense that "for" is best. (I should have read more posts before I posted my discussion answer) I like what you wrote in your last sentence, "AGI is used as the base for determining whether the taxpayer qualifies for other deductions." This is something I will take note of when I work the problems in this course as well as applying it to my own taxes. .. thanks!...
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