When taxable income exceeds certain levels,the itemized deductions and exemptions
A) are reduced.
B) are limited but may be carried over to future years.
C) reach a maximum allowable amount.
D) increase in proportion to increases in taxable income.

Question

Quizplus · Accepted Answer

When taxable income exceeds certain levels, the itemized deductions and exemptions are reduced. This is known as the phase-out or limitation of deductions and exemptions. Once the income reaches a certain threshold, the deductions and exemptions begin to decrease until they are eventually eliminated.

When Taxable Income Exceeds Certain Levels,the Itemized Deductions and Exemptions