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Which of the following would result in a reduction of taxable income? Multiple Choice tax credits...

Which of the following would result in a reduction of taxable income?

Multiple Choice

  • tax credits

  • portfolio income

  • earned income

  • business income

  • union dues

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Answer #1

Ans) Tax Credits

Tax Credits: Tax credit reduced the amount of tax owed to Government like deductions and exemption.

Portfolio Income: Portfolio Income results increase in taxable income,it includes dividend,Interest Income etc.

Earned Income: Earned Income also results increase in taxable income,it includes income from job or self employed income.

Business Income: Business Income, as a name implied income from Business,its also results increase in taxable income.

Union dues:As per the new provision applicable from 2018-2025 no employess can deduct Union duefrom income even if the employee can itemize deduction and in case of self employed taxpyer paid union due it is treated as business expense.

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