Tax Preparation Deductions and Credits 1 — Questions and Answers
Question 1: What is the 2024 standard deduction for a single taxpayer under age 65?
- $12,000
- $13,850
- $14,600 (Correct answer)
- $29,200
Correct answer: $14,600
The standard deduction for a single filer in 2024 is $14,600, adjusted annually for inflation.
Question 2: Which of the following is an above-the-line deduction (adjustment to income)?
- Mortgage interest
- Charitable contributions
- Student loan interest (Correct answer)
- State income taxes
Correct answer: Student loan interest
Student loan interest (up to $2,500) is an above-the-line deduction that reduces AGI regardless of whether the taxpayer itemizes.
Question 3: What is the maximum Child Tax Credit per qualifying child for 2024?
- $1,000
- $1,500
- $2,000 (Correct answer)
- $3,600
Correct answer: $2,000
The Child Tax Credit is up to $2,000 per qualifying child under age 17, with a refundable portion of up to $1,700.
Question 4: The Earned Income Tax Credit (EITC) is best described as:
- A deduction for low-income workers
- A refundable credit for low-to-moderate income workers (Correct answer)
- A nonrefundable credit for all wage earners
- A deduction only for self-employed individuals
Correct answer: A refundable credit for low-to-moderate income workers
The EITC is a refundable credit, meaning it can result in a refund even if the taxpayer has no tax liability.
Question 5: Medical expenses are deductible as an itemized deduction to the extent they exceed what percentage of AGI?
- 5%
- 7.5% (Correct answer)
- 10%
- 12%
Correct answer: 7.5%
Medical expenses exceeding 7.5% of adjusted gross income (AGI) are deductible as an itemized deduction on Schedule A.
Question 6: The American Opportunity Tax Credit (AOTC) provides a maximum annual credit of:
- $1,000
- $2,000
- $2,500 (Correct answer)
- $4,000
Correct answer: $2,500
The AOTC provides up to $2,500 per eligible student per year for the first four years of higher education.
Tax Preparation Deductions and Credits 1
What is the 2024 standard deduction for a single taxpayer under age 65?