Which of the following statements is true concerning deductions \"for\" and \"fr
ID: 2500809 • Letter: W
Question
Which of the following statements is true concerning deductions "for" and "from" adjusted gross income (A.G.I.)?
a. A deduction from A.G.I. has no effect on the taxpayer's self-employment tax liability.
b. Corporations, like individuals, must classify their deductions as deductions for and from A.G.I.
c. Misclassification of a deduction for A.G.I. has no effect on the taxpayer's tax liability, assuming the taxpayer itemizes her or his deductions.
d. Misclassification of a deduction for A.G.I. never has an effect on the taxpayer's medical expense deduction.
Explanation / Answer
a) A deduction from AGI has no effect on the taxpayer's self employment tax liability
(This is because self emploment earnings are determined without giving regard to itemised deductions)