In terms of the tax formula applicable to individual taxpayers, which of the following statements, if any, is correct?
A)In arriving at taxable income, a taxpayer must choose between the standard deduction and itemized deductions.
B)In arriving at AGI, personal and dependency exemptions are subtracted from gross income.
C)In arriving at taxable income, a taxpayer must choose between the standard deduction and the deduction for qualified business income.
D)The tax formula does not apply if a taxpayer elects to claim the standard deduction.
E)None of these.

Question

Quizplus · Accepted Answer

In the tax formula for individual taxpayers, to arrive at taxable income, a taxpayer must choose between taking the standard deduction or itemizing deductions (such as mortgage interest, state and local taxes, charitable contributions, etc.). This choice depends on which option provides the greater tax benefit.

In Terms of the Tax Formula Applicable to Individual Taxpayers