Carter incurred the following expenses in the current year: $500 for the preparation of a personal income tax return, $100 for custodial fees on an IRA, $150 for professional publications, and $2,000 for union dues. Carter's current-year adjusted gross income is $75,000. Carter, who is not self-employed, itemizes deductions. What will Carter's deduction be for miscellaneous itemized deductions after any limitations in the current year?
Ans-Miscellaneous itemized deductions are deductible to the extent that such miscellaneous itemized deductions exceed 2% of Adjusted Gross income (AGI)-
AGI= $75,000 *2%= $1,500
| Tax preparation | $500 |
| Custodial Fees | $100 |
| Publications | $150 |
| Union Dues | $2,000 |
| Total Misc. Deductions | $2,750 |
| ($1,500) 2% of AGI | |
| 1,250 Allowable Misc. Dedductions |
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Carter incurred the following expenses in the current year: $500 for the preparation of a personal...