Question

Which of the following items would be an itemized deduction on Schedule A of Form 1040 not subject to the 2%-of-AGI floor?

a) State and local sales taxes.

b) Interest on home mortgage.

c) Charitable contributions.

d) Unreimbursed moving expenses of an employee (not in the military).

e) None of these.

Answer 1

Charitable contributions are an itemized deduction on Schedule A of Form 1040 that are not subject to the 2%-of-AGI floor.

Step-by-step explanation:

The itemized deduction on Schedule A of Form 1040 not subject to the 2%-of-AGI floor is charitable contributions. Itemized deductions are specific expenses allowed by the IRS to be deducted from a taxpayer's adjusted gross income to decrease taxable income and therefore reduce the tax liability. Deductions such as state and local sales taxes, interest on home mortgage, and charitable contributions can be itemized on Schedule A. However, unreimbursed employee expenses, including unreimbursed moving expenses for non-military employees are no longer deductible due to changes in tax law after 2017.