Question

Which of the following statements is correct regarding itemized deductions?

a. Only taxpayers under age 65 at the end of the year are subject to the phase-out of itemized deductions
b. All itemized deductions are subject to a phase-out for higher income taxpayers
c. Only itemized deductions that do not have floor limitations are subject to a phase-out for higher income taxpayers
d. Charitable contributions, real estate taxes, and qualified mortgage interest are among the itemized deductions that are subject to a phase-out

Answer 1

The correct statement regarding itemized deductions is that all itemized deductions are subject to phase-out for higher income taxpayers, meaning as income increases, the permissible amount of deductions can decrease for certain thresholds.

Step-by-step explanation:

The statement that is correct regarding itemized deductions is that all itemized deductions are subject to a phase-out for higher income taxpayers. This means that as a taxpayer's adjusted gross income increases, they may be limited in the amount of itemized deductions they can take, such as for state and local taxes, mortgage interest, and other itemized deductions on their tax return. Taxpayers who earn above certain thresholds may experience a reduction in some of their itemized deductions. However, not all deductions are subject to phase-out. It is important to note that certain deductions, like charitable contributions, have their own specific rules and limitations.