Ch 6 part 1 individual for AGI deductions

Question 1

For AGI deductions aka
“Above the Line” deductions

Answer 1

In general, but not always,
tend to be business,
investment, or job-related
expenses

Question 2

From AGI deductions aka
“Below the Line” deductions

Answer 2

In general, but not always,
tend to be personal-related
expenses

Question 3

Tax-Advantaged Retirement
Accounts

Answer 3

• Pension plans
• Traditional IRAs
• Roth IRAs
• 401(k) accounts (traditional and Roth available)
• Additional options for self-employed taxpayers

Question 4

Individual Retirement Accounts
(IRAs)

Answer 4

• Taxpayers with earned income may establish traditional or Roth IRAs
• There are many differences between the two types of IRAs, but the contribution limit is the same: $6,500 in 2023, $7,500 if age 50 or over
• Can contribute to both types of IRAs, but in total, max contribution is $6,500 (if under 50 years old)
• You decide how the money is invested and
  earnings grow tax-free in the accounts!