A taxpayer, age 45, is a single filer with high income. Which of the following itemized deductions is subject to a 'floor' based on Adjusted Gross Income (AGI) in the current tax year?

Answer options:

Medical expenses.

State and local taxes (SALT).

Charitable contributions.

Mortgage interest.

How to approach this question

Floor = You must pay X% of your income before you deduct anything. Ceiling = You can only deduct up to X amount. Medical has a 7.5% floor.

Full Answer

A.Medical expenses.✓ Correct

Medical expenses are deductible only to the extent they exceed 7.5% of AGI (the floor). State taxes and mortgage interest have caps/ceilings, not floors.

Common mistakes

Confusing floors (minimum threshold) with ceilings (maximum limit).

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