Answer the following statements true (T) or false (F)
1. Taxpayers have the choice of claiming either deductions for AGI or the standard deduction.
2. Refundable tax credits are allowed to reduce or totally eliminate a taxpayer's tax liability but any credits in excess of the tax liability are lost.
3. Nonrefundable tax credits are allowed to reduce or totally eliminate a taxpayer's tax liability but any credits in excess of the tax liability are lost.
4. The standard deduction is the maximum amount of itemized deductions which may be claimed by a taxpayer and is based on an individual's filing status, age, and vision.
5. Nonresident aliens are allowed a full standard deduction.
1. FALSE
All taxpayers are allowed to deduct their qualifying deductions for AGI. In addition, taxpayers have the choice of claiming either itemized deductions or the standard deduction as deductions from AGI.
2. FALSE
Refundable tax credits may reduce the tax liability to zero and, if some credit still remains, are refundable or paid by the government to the taxpayer.
3. TRUE
Nonrefundable credits can only reduce the tax liability to zero. The excess is lost.
4. FALSE
The standard deduction, set by Congress, is not directly related to itemized deductions. It is the alternative to itemized deductions.
5. FALSE
The standard deduction is not available to nonresident aliens.
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