100% CORRECT WELL DETAILED ANSWERS|LATEST
UPDATE!!!!2025/2026|GUARANTEED PASS|GRADED
Sandeep, 70, and Mary, 67, are married. Sandeep's unmarried brother, John, lives with
them. Their daughter is a U.S. citizen who has been living and working abroad for many
years.
Based on this information, which option is correct? - ANSWER
Gross Income - ANSWER is the sum of the taxpayer's income earned in a year, which
may include salary, dividends, capital gains, interest income, royalties, rental income,
alimony, and retirement distributions.
Certain items subtracted from a taxpayer's gross income to calculate their AGI are referred
to as adjustments to income.
Adjusted gross income (AGI) - ANSWER is a figure that the Internal Revenue Service
uses to determine a taxpayer's income tax liability for the year. The IRS calculates it by
subtracting certain adjustments from gross income, such as educator expenses, student loan
interest, and other adjustments.
Common Transactions as Exclusions:
Some common transactions as exclusions or deductions from gross income are: -
ANSWER Educator expenses
Self-employment tax
Alimony payments
Early withdrawal penalty
1
,Self-employed health insurance
Charitable contributions
Traditional IRA
Health savings account
Student loan interest
Jury duty
Alimony Payments - ANSWER Payment to Spouse
ex-spouse
former spouse
legal separation instrument
What expenses qualify - ANSWER remarriage
death
court order
medical bills
housing costs
other expenses
person who is paying alimony will deduct to income
person who is receiving alimony will treat as a income
what information needed to complete the schedule 1 - ANSWER Exact amount, Social
Security number, date of divorce
Before December 31, 2018 - ANSWER Taxable consequences of alimony applies to
divorce decrees
2
, Early withdrawal penalty - ANSWER early withdrawal, charged , maturity date
expenses qualify : deduct penalties, drawing fundsdeferred interest .
How to report :
Interest income -form 1099-int
Deduction -form 1040 Schedule 1
Self-Employed Health Insurance - ANSWER Net profit on schedule c
Deduct the cost
Who is eligible?
Medical, dental, vision, Supplemental, Long term care
self-employed taxpayer, tax payer spouse, tax payer dependents
Other rules: can't
Deduct payments
Participate in health plan- employer, spouses of tax payer employer, employer's of tax
dependent
What is the limit:
net self employment profit
one-half of the self-employment tax
Income Inclusion - ANSWER Traditional IRA
HSA
Student Loan Interest-maximum $2500
Income excluded from the IRS's calculation of income tax - ANSWER Includes life
insurance death benefit proceeds, child support, welfare, and municipal bond income.
3
UPDATE!!!!2025/2026|GUARANTEED PASS|GRADED
Sandeep, 70, and Mary, 67, are married. Sandeep's unmarried brother, John, lives with
them. Their daughter is a U.S. citizen who has been living and working abroad for many
years.
Based on this information, which option is correct? - ANSWER
Gross Income - ANSWER is the sum of the taxpayer's income earned in a year, which
may include salary, dividends, capital gains, interest income, royalties, rental income,
alimony, and retirement distributions.
Certain items subtracted from a taxpayer's gross income to calculate their AGI are referred
to as adjustments to income.
Adjusted gross income (AGI) - ANSWER is a figure that the Internal Revenue Service
uses to determine a taxpayer's income tax liability for the year. The IRS calculates it by
subtracting certain adjustments from gross income, such as educator expenses, student loan
interest, and other adjustments.
Common Transactions as Exclusions:
Some common transactions as exclusions or deductions from gross income are: -
ANSWER Educator expenses
Self-employment tax
Alimony payments
Early withdrawal penalty
1
,Self-employed health insurance
Charitable contributions
Traditional IRA
Health savings account
Student loan interest
Jury duty
Alimony Payments - ANSWER Payment to Spouse
ex-spouse
former spouse
legal separation instrument
What expenses qualify - ANSWER remarriage
death
court order
medical bills
housing costs
other expenses
person who is paying alimony will deduct to income
person who is receiving alimony will treat as a income
what information needed to complete the schedule 1 - ANSWER Exact amount, Social
Security number, date of divorce
Before December 31, 2018 - ANSWER Taxable consequences of alimony applies to
divorce decrees
2
, Early withdrawal penalty - ANSWER early withdrawal, charged , maturity date
expenses qualify : deduct penalties, drawing fundsdeferred interest .
How to report :
Interest income -form 1099-int
Deduction -form 1040 Schedule 1
Self-Employed Health Insurance - ANSWER Net profit on schedule c
Deduct the cost
Who is eligible?
Medical, dental, vision, Supplemental, Long term care
self-employed taxpayer, tax payer spouse, tax payer dependents
Other rules: can't
Deduct payments
Participate in health plan- employer, spouses of tax payer employer, employer's of tax
dependent
What is the limit:
net self employment profit
one-half of the self-employment tax
Income Inclusion - ANSWER Traditional IRA
HSA
Student Loan Interest-maximum $2500
Income excluded from the IRS's calculation of income tax - ANSWER Includes life
insurance death benefit proceeds, child support, welfare, and municipal bond income.
3
