USA: +1 (725) 712-1730 
Sign in
What is the distinction between deductions for AGI and deductions from AGI and why should this be important for individuals? As you review deductions from AGI and for AGI, how should bribes and kickbacks be treated for tax purposes? Are they a deduction and are they allowed? As you may recall, Al Capone’s conviction caused mobsters and other illegal gangsters to rethink their method of keeping detailed records. Why did this rethink occur? How different was this situation of bribes and kickbacks to how multimillion-dollar corporations do business now?
Expert Answer
Deductions for AGI” can be claimed even if taxpayer does not itemize. It is important in determining the amount of certain itemized deductions.
Deductions from AGI,” on the other hand, must exceed the standard deduction to provide any tax benefit. Also called “below the line” or itemized deductions.
*Deductions are disallowed for certain specific types of expenditures that are considered contrary to public policy-Examples: penalties, fines, illegal bribes or kickbacks, two-thirds of treble damage payments for violation of anti-trust law. A bribe paid to a domestic official is not deductible if it is illegal in the US*Foreign bribes are deductible unless they are unlawful under the Foreign Corrupt Practices Act of 1977.
