Which of the following is a true statement? a. the deduction for interest on educational loans is subject to a phase-out limitation. b. most business deductions are claimed as "below the line" deductions c. self-employed taxpayers are allowed to deduct health care premiums even if the taxpayer is eligible to participate in an employer-provided health plan. d. all investment expenses are itemized deductions e. all of these are false.

The deduction for interest on educational loans is subject to a phase-out limitation.

Option A

Explanation:

Phase out it is a term heard in the financial world which refers to the gradual reduction to a credit for which a taxpayer is eligible to qualify limit of their income approaches. For higher income there is minimal amount and for lower income its maximum amount.  

Internal Revenue Services has recognized phase out for several credits. Phase-out is designed for low-to-middle income households. Student Loan Interest Credit maximum tax credit is $2,500.

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