What are the differences between the following components of taxable income? Provide at least one example of each.
o Deductions for AGI and deductions from AGI
o Gross income and AGI
o AGI and taxable income
o Tax deduction and tax credit
o Personal exemption and dependency exemption
The response addresses the query posted in 691 words with APA references
// There are a number of deductions and exemptions allowed from the gross income or earnings of a taxable individual or enterprise. The below-mentioned section describes the distinctions among the various terms that hold significance in taxation laws. //
Deductions for AGI and Deductions from AGI
There are certain deductions that are allowed to be deducted from the Adjusted Gross Income (AGI) while there are also other deductions that are not at all included in the computation of AGI. The specific business or personal expenditure, which do not form part of the calculations or are not included in the figure of AGI are referred as 'Deductions for AGI', while the expenses that are deducted for calculating the AGI are referred as 'Deductions from AGI'. A few examples can be of the principal repayment and interest payments for the housing loan and education loan taken by an individual. These expenses reduce the AGI of the individual, which is further subject to other deductions (Balachandran & Thothadri, 2012). The distinction between the two deductions is often presented in the ...
The differences between the following components of taxable income are determined. The response addresses the query posted in 691 words with APA references.