Mitch is in the 24% tax bracket.He may receive a different tax benefit for a $2,000 expenditure that is classified as a deduction from adjusted gross income (AGI) than he will receive for a $2,000 expenditure that is classified as a deduction for AGI.

Question

Quizplus · Accepted Answer

Deductions from AGI (such as contributions to a traditional IRA) reduce Mitch's taxable income, while deductions for AGI (such as charitable donations) are taken into account before calculating his taxable income. This means that the tax benefit for a deduction from AGI may be larger for Mitch than for a deduction for AGI.

Mitch Is in the 24% Tax Bracket