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Above-the-Line Deductions

Tax deductions or adjustments that modify a taxpayer's gross income and are used to calculate a taxpayer's Adjusted Gross Income or (AGI) are called above-the-line deductions.  When we refer to the "line", we are simply referring to AGI (Adjusted Gross Income).  So, you can think of the terms "above-the-line" and "below-the-line" as "before AGI" and "after AGI", respectively.  In other words,  tax deductions that occur pror to AGI being calculated are called above-the-line deductions.  Those that occur after AGI is calculated are called below-the-line deductions (either itemized deductions or the standard deduction).

Above-the-line deductions are used in the following basic calculation:

Gross Income - Above-the-Line Deductions = Adjusted Gross Income

There are several above-the-line write-offs that help reduce a taxpayer's tax liability.  Some of the above-the-line deductions that might help truck drivers or owner-operators are:

  • Rental Property Deductions (Schedule E)
  • Alimony Payments
  • IRA Contributions
  • Schedule C (Business Losses)
  • Student Loan Interest Paid
  • Moving Expenses
  • Stock Losses

Note that the employee business expenses that a truck driver deducts are not above-the-line deductions because they are taken after AGI is calculated.  Employee business expenses are one component of a company truck driver or owner operator's itemized deductions, and itemized deductions are below-the-line deductions.


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