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CPA Regulation Reg · Question of the Day

CPA Regulation Reg Question of the Day

A fresh daily question to build accuracy, reinforce recall, and turn practice into a steady habit.
Tuesday, September 8, 2026

A taxpayer has wages of $80,000 and net SE income of $20,000. SE tax is $2,827 (50% deductible = $1,413). Self-employed health insurance premiums paid are $6,000. Traditional IRA contribution is $6,000 (fully deductible; not an active participant). What is AGI?

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Question of the Day

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A taxpayer has wages of $80,000 and net SE income of $20,000. SE tax is $2,827 (50% deductible = $1,413). Self-employed health insurance premiums paid are $6,000. Traditional IRA contribution is $6,000 (fully deductible; not an active participant). What is AGI?

  1. $100,000
  2. $86,587 (correct answer)
  3. $88,000
  4. $80,000

Explanation: Total income = $80,000 + $20,000 = $100,000. Above-the-line deductions: SE tax deduction $1,413 + self-employed health insurance $6,000 + IRA $6,000 = $13,413. AGI = $100,000 - $13,413 = $86,587. Option A omits all deductions. Option C omits the SE tax deduction. Option D omits SE income and the deductions.