Gerald bought his first home last year and has a mortgage. He will itemize his deductions on his tax return for the first time. Which of the following is affected by itemized deductions? a) Adjusted gross income b) Taxable income c) Total income d) Federal withholdings

The correct answer is letter "B": Taxable income.

Explanation:

While filing a tax return, taxpayers have the option of submitting deductions. Taxpayers can claim for a standard deduction or an itemized deduction. By selecting the itemized deduction, taxpayers have the opportunity of accessing a list of deductions based on different expenses incurred given a tax period.  

Medical expenses, home mortgage interest, property, state, and local income taxes or charitable contributions are expenditures that could be subtracted from the taxpayers Adjusted Gross Income (AGI) to reduce their tax bills.