Question

because the patel family bought a home this year, they are allowed to claim this expense on their tax return. by doing this, their taxable income should be lowered, thus requiring them to pay less taxes. what does this claim best demonstrate?

○ a standard deduction

○ an itemized deduction

○ an earned income credit

○ an adjusted gross income

question 16
3 pts
alicia has a very simple tax return and some degree of tax knowledge. she wants to file taxes without spending any extra money. what is her best option for filing taxes?

○ independently prepare her taxes.

○ prepare her taxes using an electronic tax program.

○ hire someone to prepare her taxes.

○ choose to not file taxes this year.

Explanation:

First Question (Top Question)

• A standard deduction is a fixed amount subtracted from income, not related to specific expenses like buying a home.
• An itemized deduction allows taxpayers to claim specific expenses (like home purchase - related costs) to reduce taxable income, which matches the Patel family's situation.
• Earned income credit is a tax credit for low - to - moderate - income earners, not related to expense claims.
• Adjusted gross income is income after certain adjustments, not a deduction type.

• If Alicia has a simple tax return and tax knowledge, independently preparing her taxes is free and feasible.
• Electronic tax programs may have costs (even if some are free, independent preparation is more direct for a simple return with knowledge).
• Hiring someone costs money, which she doesn't want to spend.
• Not filing taxes is illegal (assuming she has a filing requirement).

Answer:

B. an itemized deduction

Question 16