General Education Development (GED) Practice Exam

When itemizing deductions on a federal tax return, an individual taxpayer may be able to deduct all but which of the following?

1. Interest paid on a mortgage

2. Charitable donations

3. Losses from theft

4. Groceries

The correct answer is: Groceries

When itemizing deductions on a federal tax return, taxpayers can deduct a variety of expenses, which often include items like interest paid on a mortgage, charitable donations, and losses from theft. However, groceries do not qualify as a deductible expense. The IRS does not allow deductions for personal expenses that are considered necessary for daily living, including food and groceries. This distinction is important for taxpayers to understand, as it helps them accurately assess what can be included in their itemized deductions. On the other hand, mortgage interest is a common deduction, especially for homeowners, and charitable donations can be deducted as long as they meet certain criteria, such as being made to qualified organizations. Similarly, losses from theft can be deducted if they exceed a certain threshold. Understanding these nuances enables taxpayers to maximize their allowed deductions appropriately while following IRS rules.