Question

question 1

which of the following is an example of a tax deduction?

educational expenses and student loans
state and local, sales and property taxes paid
charitable contributions
interest paid on home mortgage
all of these

question 2

tax evasion is legal.

true
false

select is the legitimate minimizing of taxes, using methods included in the tax code.

Explanation:

Analyze tax deductions

We evaluate the options for Question 1. A tax deduction reduces taxable income. Under the US tax code, qualified educational expenses, state and local taxes (SALT), charitable contributions, and home mortgage interest are all standard examples of itemized or above-the-line tax deductions. Therefore, all of these options represent tax deductions. This relates to our understanding of Tax Structures.

Evaluate tax evasion legality

We evaluate the statement in Question 2: "Tax evasion is legal." Tax evasion is the illegal practice of not paying taxes, such as by deliberately misrepresenting the true state of affairs to the tax authorities. Therefore, the statement is false.

Define legitimate tax minimization

We evaluate the fill-in-the-blank dropdown in Question 3: "[Select] is the legitimate minimizing of taxes, using methods included in the tax code." Tax avoidance is the legal usage of the tax regime to one's own advantage to reduce the amount of tax that is payable by means that are within the law. Thus, "tax avoidance" is the correct term.

Answer:

Question 1

• Educational expenses and student loans
• State and local, sales and property taxes paid
• Charitable contributions
• Interest paid on home mortgage
• All of these (Correct answer)

Question 2

• True
• False (Correct answer)

Question 3

• tax evasion
• tax liability
• tax avoidance (Correct answer)