Question

Which of the following causes taxable income to be a smaller amount than gross income for...

Which of the following causes taxable income to be a smaller amount than gross income for an individual taxpayer?

a) Nonrefundable tax credits
b) The greater of itemized deductions or the standard deduction
c) Exclusions from gross income
d) Redundable tax credits

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Answer #1

Gross income is basically the income which your earn with inclusions of Investments such as bonds, stocks etc or social security benefits. Under IRS (U.S Internal Revenue System) it is total of all earnings and income sources throught the year.

Whereas Taxable income is the income after exclusion and exemptions from Gross income on which you have to pay tax.

So, causes which makes taxable income smaller than gross income will be

b. The greater of itemized deduction or the standard deduction

C. Exclusions from gross income

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