Explain whether a taxpayer receive more benefits from deducting an expense or from taking a credit. Also, explain the situation in the case of deduction from AGI.

Question

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Answer 1

Question

Chapter 13, Problem 1DQ

To determine

Explain whether a taxpayer receive more benefits from deducting an expense or from taking a credit. Also, explain the situation in the case of deduction from AGI.

Expert Solution & Answer

Explanation of Solution

If the margina tax rate of a taxpayer is less than 25%, it would be better for him/her to take a credit of 25% of the expense. But, if the marginal tax rate is greater than 25%, he/she would be benefited more from taking a deduction.

Otherwise, if the item are deductible from adjusted gross income(AGI), the taxpayer would get benefit onlr if he/she itemized his/her deductions.

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Answer 2

Question

Chapter 13, Problem 1DQ

To determine

Explain whether a taxpayer receive more benefits from deducting an expense or from taking a credit. Also, explain the situation in the case of deduction from AGI.

Expert Solution & Answer

Explanation of Solution

If the margina tax rate of a taxpayer is less than 25%, it would be better for him/her to take a credit of 25% of the expense. But, if the marginal tax rate is greater than 25%, he/she would be benefited more from taking a deduction.

Otherwise, if the item are deductible from adjusted gross income(AGI), the taxpayer would get benefit onlr if he/she itemized his/her deductions.

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Answer 3

Question

Chapter 13, Problem 1DQ

To determine

Explain whether a taxpayer receive more benefits from deducting an expense or from taking a credit. Also, explain the situation in the case of deduction from AGI.

Expert Solution & Answer

Explanation of Solution

If the margina tax rate of a taxpayer is less than 25%, it would be better for him/her to take a credit of 25% of the expense. But, if the marginal tax rate is greater than 25%, he/she would be benefited more from taking a deduction.

Otherwise, if the item are deductible from adjusted gross income(AGI), the taxpayer would get benefit onlr if he/she itemized his/her deductions.

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Answer 4

Question

Chapter 13, Problem 1DQ

To determine

Explain whether a taxpayer receive more benefits from deducting an expense or from taking a credit. Also, explain the situation in the case of deduction from AGI.

Expert Solution & Answer

Explanation of Solution

If the margina tax rate of a taxpayer is less than 25%, it would be better for him/her to take a credit of 25% of the expense. But, if the marginal tax rate is greater than 25%, he/she would be benefited more from taking a deduction.

Otherwise, if the item are deductible from adjusted gross income(AGI), the taxpayer would get benefit onlr if he/she itemized his/her deductions.

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Answer 5

Chapter 13, Problem 1DQ

To determine

Explain whether a taxpayer receive more benefits from deducting an expense or from taking a credit. Also, explain the situation in the case of deduction from AGI.

Expert Solution & Answer

Explanation of Solution

If the margina tax rate of a taxpayer is less than 25%, it would be better for him/her to take a credit of 25% of the expense. But, if the marginal tax rate is greater than 25%, he/she would be benefited more from taking a deduction.

Otherwise, if the item are deductible from adjusted gross income(AGI), the taxpayer would get benefit onlr if he/she itemized his/her deductions.

Answer 6

Chapter 13, Problem 1DQ

To determine

Explain whether a taxpayer receive more benefits from deducting an expense or from taking a credit. Also, explain the situation in the case of deduction from AGI.

Expert Solution & Answer

Explanation of Solution

If the margina tax rate of a taxpayer is less than 25%, it would be better for him/her to take a credit of 25% of the expense. But, if the marginal tax rate is greater than 25%, he/she would be benefited more from taking a deduction.

Otherwise, if the item are deductible from adjusted gross income(AGI), the taxpayer would get benefit onlr if he/she itemized his/her deductions.

Answer 7

Chapter 13, Problem 1DQ

To determine

Explain whether a taxpayer receive more benefits from deducting an expense or from taking a credit. Also, explain the situation in the case of deduction from AGI.

Answer 8

Expert Solution & Answer

Explanation of Solution

If the margina tax rate of a taxpayer is less than 25%, it would be better for him/her to take a credit of 25% of the expense. But, if the marginal tax rate is greater than 25%, he/she would be benefited more from taking a deduction.

Otherwise, if the item are deductible from adjusted gross income(AGI), the taxpayer would get benefit onlr if he/she itemized his/her deductions.