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 these.

Question

Quizplus · Accepted Answer

None of the statements are correct. In arriving at AGI, taxpayers claim deductions for AGI such as self-employment taxes, student loan interest, and contributions to retirement accounts. In arriving at taxable income, taxpayers claim deductions from AGI such as the standard deduction and itemized deductions. There is no need for a taxpayer to elect between these types of deductions as they serve different purposes in the tax calculation. The standard deduction is available even if a taxpayer has deductions for AGI.

In Terms of the Tax Formula Applicable to Individual Taxpayers