Aaron Is a 34-Year-Old Head of Household and a Self-Employed

question 17

Multiple Choice

Aaron is a 34-year-old head of household and a self-employed taxpayer. He contributed the maximum amount to his IRA account during the current year, and his net earnings from his business totaled $29,000. How much can Aaron deduct for AGI this year?

• A)$- 0 -
• B)$3,200
• C)$3,800
• D)$5,000
• E)$5,500

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Definitions:

Average Tax Rate

The average tax rate is the ratio of the total amount of taxes paid to the total tax base (taxable income or spending), essentially reflecting the percentage of income that goes to taxes.

Total Taxes

refer to the comprehensive amount of taxes (federal, state, local) levied on individuals, corporations, and other entities within a fiscal period.

Taxable Income

The portion of income subject to taxation after all deductions and exemptions have been applied according to tax laws.

Entry Fees

Charges that must be paid to gain access to a particular service, event, or location.