Adjusted Gross Income and Gross Income

Question: How does “adjusted gross income” differ from “gross income”? Answer: For income tax purposes, there are three levels of income: gross income, adjusted gross income, and taxable income. Adjusted Gross Income.  Firstly, to arrive at adjusted gross income (AGI), you are allowed a long list of deductions from gross income. For example, business expenses, certain losses, and retirement account contributions. These deductions, also called above-the-line deductions, are allowed even if you don’t itemize your personal deductions

Run a business from home?

Home Office Deduction. Do you qualify for a home office deduction? If you run a business from home, you may be entitled to a home office deduction. This is only if you claim your home office as a business write-off on a Schedule C, as miscellaneous deductions have been eliminated for tax years 2018-2025. Your business space doesn’t have to take up an entire room, but you have to use that space exclusively for business

How to Maximize Deductions for Assisted Living

It’s possible that someone in your family will need assisted living care at some point in their life. This care can be at an assisted living facility, a nursing home, or in their own home. Assisted living care is expensive and not fully reimbursable by typical health insurance policies. There is a medical expense itemized deduction when the out-of-pocket amount exceeds 10 percent of your adjusted gross income. Here’s what you can do to increase

Will Your Tax Return be Audited?

Will Your Tax Return be Audited? Few things are more unnerving than having your tax return audited by the IRS. The IRS uses that “audit anxiety” to help keep taxpayers honest on their tax returns. DIF scores count The IRS evaluates tax returns based on their “DIF” scores, a set of IRS formulas known as the “Discriminate Function System.” About three-quarters of all returns audited are selected by the DIF computer, which compares deductions, credits,