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

Question

Quizplus · Accepted Answer

None of the statements are correct. A taxpayer is allowed to claim both deductions for AGI (such as IRA contributions, alimony payments, student loan interest) and deductions from AGI (such as charitable donations, mortgage interest, state and local taxes). The standard deduction is also available even if a taxpayer claims deductions for AGI. The taxable income is calculated after deducting both types of deductions from AGI.

In Terms of the Tax Formula Applicable to Individual Taxpayers