Dan is a single, self-employed carpenter who earned $120,000 this past year in self-employment income. Dan paid the following ex
penses this year. Which of the expenses are deductible for AGI.
1. The cost of health insurance.
2. The employer portion of self-employment tax paid
3. Penalty on early withdrawal of funds from a certificate of deposit
A.
All of the choices are deductible for AGI.
B.
Numbers 1 and 2 only.
C.
Numbers 2 and 3 only.
D.
None of the choices is deductible for AGI.
E.
Numbers 1 and 3 only.
1 answer:
Answer:
The correct answer is A)
All choices are deductible for Adjusted Gross Income (AGI)
Explanation:
Other items which are deductible "above the line" are:
- Contributions to a Retirement Account
- Alimonies (excludes child support)
- deductions from health savings account
etc
Cheers!
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