It has been suggested that tax policy favors deductions for AGI compared to itemized deductions. Describe two ways in which deductions for AGI are treated more favorably than itemized deductions.

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Answer 1

Textbook Question

Chapter 6, Problem 1DQ

It has been suggested that tax policy favors deductions for AGI compared to itemized deductions. Describe two ways in which deductions for AGI are treated more favorably than itemized deductions.

Expert Solution & Answer

To determine

Explain two ways in which the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions.

Explanation of Solution

Explain two ways in which the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions as follows:

When the standard deduction exceeds the itemized deduction before receiving any tax benefits from the deduction, the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions. In contract, the business deductions are deductible for AGI in ordered to reduce the taxable income without subject to overall tax limit. At the same time, itemized deductions are subject to many mechanical limitations including ceiling and floors, whereas the business deductions are not subject to these limits.

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It has been suggested that tax policy favors deductions for AGI compared to deductions from AGI (Itemized Deductions). For this discussion, describe two (2) ways in which deductions for AGI are treated more favorably than itemized deductions. Provide at least two (2) examples of each type of deduction (for AGI and from AGI)

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Answer 2

Textbook Question

Chapter 6, Problem 1DQ

It has been suggested that tax policy favors deductions for AGI compared to itemized deductions. Describe two ways in which deductions for AGI are treated more favorably than itemized deductions.

Expert Solution & Answer

To determine

Explain two ways in which the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions.

Explanation of Solution

Explain two ways in which the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions as follows:

When the standard deduction exceeds the itemized deduction before receiving any tax benefits from the deduction, the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions. In contract, the business deductions are deductible for AGI in ordered to reduce the taxable income without subject to overall tax limit. At the same time, itemized deductions are subject to many mechanical limitations including ceiling and floors, whereas the business deductions are not subject to these limits.

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Answer 3

Textbook Question

Chapter 6, Problem 1DQ

It has been suggested that tax policy favors deductions for AGI compared to itemized deductions. Describe two ways in which deductions for AGI are treated more favorably than itemized deductions.

Expert Solution & Answer

To determine

Explain two ways in which the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions.

Explanation of Solution

Explain two ways in which the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions as follows:

When the standard deduction exceeds the itemized deduction before receiving any tax benefits from the deduction, the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions. In contract, the business deductions are deductible for AGI in ordered to reduce the taxable income without subject to overall tax limit. At the same time, itemized deductions are subject to many mechanical limitations including ceiling and floors, whereas the business deductions are not subject to these limits.

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Answer 4

Textbook Question

Chapter 6, Problem 1DQ

It has been suggested that tax policy favors deductions for AGI compared to itemized deductions. Describe two ways in which deductions for AGI are treated more favorably than itemized deductions.

Expert Solution & Answer

To determine

Explain two ways in which the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions.

Explanation of Solution

Explain two ways in which the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions as follows:

When the standard deduction exceeds the itemized deduction before receiving any tax benefits from the deduction, the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions. In contract, the business deductions are deductible for AGI in ordered to reduce the taxable income without subject to overall tax limit. At the same time, itemized deductions are subject to many mechanical limitations including ceiling and floors, whereas the business deductions are not subject to these limits.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Explain two ways in which the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions.

Explanation of Solution

Explain two ways in which the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions as follows:

When the standard deduction exceeds the itemized deduction before receiving any tax benefits from the deduction, the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions. In contract, the business deductions are deductible for AGI in ordered to reduce the taxable income without subject to overall tax limit. At the same time, itemized deductions are subject to many mechanical limitations including ceiling and floors, whereas the business deductions are not subject to these limits.

Answer 8

Expert Solution & Answer

To determine

Explain two ways in which the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions.

Explanation of Solution

Explain two ways in which the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions as follows:

When the standard deduction exceeds the itemized deduction before receiving any tax benefits from the deduction, the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions. In contract, the business deductions are deductible for AGI in ordered to reduce the taxable income without subject to overall tax limit. At the same time, itemized deductions are subject to many mechanical limitations including ceiling and floors, whereas the business deductions are not subject to these limits.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Explain two ways in which the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions.

Answer 12

Explanation of Solution

Explain two ways in which the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions as follows:

When the standard deduction exceeds the itemized deduction before receiving any tax benefits from the deduction, the deductions for AGI (Adjusted Gross income) are treated more favorably than itemized deductions. In contract, the business deductions are deductible for AGI in ordered to reduce the taxable income without subject to overall tax limit. At the same time, itemized deductions are subject to many mechanical limitations including ceiling and floors, whereas the business deductions are not subject to these limits.

Answer 13

Ch. 6 - It has been suggested that tax policy favors...Ch. 6 - Prob. 2DQ Ch. 6 - Prob. 3DQ Ch. 6 - Explain why Congress allows self-employed...Ch. 6 - Prob. 5DQ Ch. 6 - Prob. 6DQ Ch. 6 - Describe the mechanical limitation on the...Ch. 6 - Prob. 8DQ Ch. 6 - Prob. 9DQ Ch. 6 - Prob. 10DQ

It has been suggested that tax policy favors deductions for AGI compared to itemized deductions. Describe two ways in which deductions for AGI are treated more favorably than itemized deductions.

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