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ACTG 470 Final Exam Questions With
Correct Answers 100% Verified.
What are deductions for AGI? - Answer✔deductions taken from gross income without further
limitation
deductions for AGI - Answer✔1. ordinary and necessary business expenses
2. alimony payments (pre-2019 divorce agreements)
3. capital losses in excess of capital gains (limited to 3,000)
4. 1/2 of self-employment tax
5. interest on student loans (up to $2,500)
6. payments to IRAs (up to 6,500, 13,000 for spousal IRAs)
Interest on loans used for qualified education expenses is deductible for - Answer✔AGI
qualified education expenses for deductible student loan interest - Answer✔tuition, fees, books
and equipment, room and board while student *for taxpayer spouse and/or dependents
Loan interest rules - Answer✔1. limited to 2,500
2. phased out if modified AGI is between 75,000 and 90,000 (or 155,000 and 185,000 for MFJ)
*modified AGI is AGI before student loan interest and tuition and fees*
3. not available if claimed as a dependent or the taxpayer is married filing separate
loan interest phaseout% - Answer✔excess MAGI/phaseout range
What are deductions from AGI? - Answer✔deductions of a personal nature that congress has
chosen to allow *standard deduction or itemized deductions*
examples of itemized deductions - Answer✔1. medical expenses
2. taxes
3. non-business interest
4. charitable contributions
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5. casualty and theft losses
5 filing statuses - Answer✔1. single
2. MFJ
3. Surviving spouse
4. head of household
5. married, filing separately
the standard deduction consists if two components - Answer✔1. the basic standard deduction
(BSD), and 2. an additional standard deduction (ASD)
On their own tax return, individuals claimed as dependents have a BSD limited to the greater
of: - Answer✔1. 1,250 or
2. 400 plus earned income (but not to exceed the normal BSD)
(ASD amounts still available)
Step by Step Standard Deduction for Dependents - Answer✔Step 1: determine the dependent's
earned income (EI) + $400
Step 2: compare amount from 1 with $1,250 and select the greater of the two
Step 3: compare amount from 2 with $13,850
Step 4: SD = the smaller of the two amounts in step 3 plus any ASD
itemized deductions provide an - Answer✔additional tax benefit to the extent they exceed the
standard deduction amount
personal expenditures that are deductible FROM AGI as itemized deductions include -
Answer✔1. medical expenses
2. certain taxes
3. certain interest expense
4. charitable contributions
5. casualty and theft losses (personal)
What are medical expenses that are deductible? - Answer✔1. doctor bills, dentistry, optometry,
surgery, medicine and drugs, hospital charges
2. cost of health insurance premiums
3. transportation costs of 22 cents per mile
2|Page
ACTG 470 Final Exam Questions With
Correct Answers 100% Verified.
What are deductions for AGI? - Answer✔deductions taken from gross income without further
limitation
deductions for AGI - Answer✔1. ordinary and necessary business expenses
2. alimony payments (pre-2019 divorce agreements)
3. capital losses in excess of capital gains (limited to 3,000)
4. 1/2 of self-employment tax
5. interest on student loans (up to $2,500)
6. payments to IRAs (up to 6,500, 13,000 for spousal IRAs)
Interest on loans used for qualified education expenses is deductible for - Answer✔AGI
qualified education expenses for deductible student loan interest - Answer✔tuition, fees, books
and equipment, room and board while student *for taxpayer spouse and/or dependents
Loan interest rules - Answer✔1. limited to 2,500
2. phased out if modified AGI is between 75,000 and 90,000 (or 155,000 and 185,000 for MFJ)
*modified AGI is AGI before student loan interest and tuition and fees*
3. not available if claimed as a dependent or the taxpayer is married filing separate
loan interest phaseout% - Answer✔excess MAGI/phaseout range
What are deductions from AGI? - Answer✔deductions of a personal nature that congress has
chosen to allow *standard deduction or itemized deductions*
examples of itemized deductions - Answer✔1. medical expenses
2. taxes
3. non-business interest
4. charitable contributions
1|Page
, ©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:43 PM.
5. casualty and theft losses
5 filing statuses - Answer✔1. single
2. MFJ
3. Surviving spouse
4. head of household
5. married, filing separately
the standard deduction consists if two components - Answer✔1. the basic standard deduction
(BSD), and 2. an additional standard deduction (ASD)
On their own tax return, individuals claimed as dependents have a BSD limited to the greater
of: - Answer✔1. 1,250 or
2. 400 plus earned income (but not to exceed the normal BSD)
(ASD amounts still available)
Step by Step Standard Deduction for Dependents - Answer✔Step 1: determine the dependent's
earned income (EI) + $400
Step 2: compare amount from 1 with $1,250 and select the greater of the two
Step 3: compare amount from 2 with $13,850
Step 4: SD = the smaller of the two amounts in step 3 plus any ASD
itemized deductions provide an - Answer✔additional tax benefit to the extent they exceed the
standard deduction amount
personal expenditures that are deductible FROM AGI as itemized deductions include -
Answer✔1. medical expenses
2. certain taxes
3. certain interest expense
4. charitable contributions
5. casualty and theft losses (personal)
What are medical expenses that are deductible? - Answer✔1. doctor bills, dentistry, optometry,
surgery, medicine and drugs, hospital charges
2. cost of health insurance premiums
3. transportation costs of 22 cents per mile
2|Page
