Bruce is employed as an executive and his wife, Marie, is a self-employed realtor. Besides Bruce's salary, Bruce and Marie own a warehouse that they rent to a local business for storage. This year they paid $1,250 for electric service in the warehouse. Marie also paid self-employment tax of $6,200 and Bruce had $7,000 of Social Security taxes withheld from his pay. Marie paid a $45 fee to rent a safe-deposit box to store records associated with her realty operation. Which of the following is a true statement?

Question

Quizplus · Accepted Answer

The safe-deposit fee and the electric bill are deductible for AGI as they are expenses related to the production of income. One-half of the Social Security tax is deductible, but it is not deductible for AGI, rather it is deducted as an itemized deduction. The self-employment tax is also deductible, but it is deducted as an adjustment to income rather than for AGI.

Bruce Is Employed as an Executive and His Wife, Marie