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  • Above-the-line Deductions Cpelite T.m .

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ABOVE-THE-LINE DEDUCTIONS Recommended CPE Credit: 6 HRS B PREPARED BY CPElite T.M . In a Class By Yourself T.M . (800) 9500-CPE 2013 EDITION P.O. BOX 1059, CLEMSON, SC 29633-1059 & P.O. BOX 721,.

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Think of your adjusted gross income as "the line." Above-the-line deductions are the ones you take before determining your AGI and are typically called adjustments to income. Below-the-line deductions are the ones you're eligible to take after determining your AGI and are known as itemized deductions.

Itemized deductions are referred to as "below-the-line" deductions because they are deducted after the taxpayer determines AGI. Examples include: qualified interest, including mortgage interest, student loan interest, and investment interest (if more than investment income);

Above-the-line deductions are those that are deducted from your gross income to calculate your adjusted gross income. Some of the most common above-the-line deductions that taxpayers take include retirement contributions, student loan interest, healthcare expenses, and business expenses.

Above-the-line vs. If “above-the-line” deductions are everything you can deduct before adjusted gross income, then “below-the-line” deductions are everything you deduct after adjusted gross income. (Therefore, adjusted gross income is the “line” in both names).

Internal Revenue Code Section 62(a)(1) allows above-the-line deductions for most ordinary and necessary business expenses which are attributable to a trade or business carried on by the taxpayer, if such trade or business does not consist of the performance of services by the taxpayer as an employee.

A self-employed individual may deduct 50 percent of his or her self-employment tax liability for the tax year. The deduction is claimed as an above-the-line-deduction is computing adjusted gross income (AGI). The taxpayer does not need to itemize deductions to claim the deduction.

Below the Line – “Above the Line” refer to the income and expenses that a company incurs due to normal operations. It is also the gross margin that a business earns. Whereas below the line is operating expenses, interest, and taxes.

Above-the-line deductions, otherwise known as "adjustments to income," are deductions that reduce your annual adjusted gross income (AGI). You can claim above-the-line deductions whether you choose to itemize your deductions or claim the standard deduction.

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© Copyright 1997-2025
airSlate Legal Forms, Inc.
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Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
Content Takedown Policy
About Us
Blog
Affiliates
Contact Us
Privacy Notice
Delete My Account
Site Map
Industries
Forms in Spanish
Localized Forms
State-specific Forms
Forms Kit
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate workflows
DocHub
Instapage
Social Media
Call us now toll free:
1-877-389-0141
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232