To the Internal Revenue Service (IRS), the reasonableness of total itemized deductions depends on the taxpayer’s adjusted gross income. Large deductions, which include charity and medical deductions, are more reasonable for taxpayers with large adjusted gross incomes. If a taxpayer claims larger than average itemized deductions for a given level of income, the chances of an IRS audit are increased. Data (in thousands of dollars) on Adjusted Gross Income (AGI) and the Reasonable Amount of Itemized Deductions (RAID) are as follows: a. When AGI is zero, the RAID is $4680 in this linear model. Since x = 0 is not included in the sample values of the independent variable, this interpretation cannot be a meaningful one. For every one thousand dollar of the AGI, the RAID increases by $161 in this linear model. b. When AGI is zero, the RAID is $4680 in this linear model. For every one thousand dollar of the AGI, the RAID increases by $161 in this linear model. c. When AGI is zero, the RAID is $4680 on average in this linear model. Since x = 0 is not included in the sample values of the independent variable, this interpretation cannot be a meaningful one. For every increase of one thousand dollar in the AGI, the RAID increases by $161 on average in this linear model. d. When AGI is zero, the RAID is $468 on average in this linear model. Since x = 0 is not included in the sample values of the independent variable, this interpretation cannot be a meaningful one. For every increase of one dollar in the AGI, the RAID increases by $161 in this linear model. AGI : 22, 27, 32, 48, 65, 85, 120 RAID : 9.6, 9.6, 10.1, 11.1, 13.5, 17.7, 25.5
To the Internal Revenue Service (IRS), the reasonableness of total itemized deductions depends on the taxpayer’s adjusted gross income. Large deductions, which include charity and medical deductions, are more reasonable for taxpayers with large adjusted gross incomes. If a taxpayer claims larger than average itemized deductions for a given level of income, the chances of an IRS audit are increased. Data (in thousands of dollars) on Adjusted Gross Income (AGI) and the Reasonable Amount of Itemized Deductions (RAID) are as follows:
| a. |
When AGI is zero, the RAID is $4680 in this linear model. Since x = 0 is not included in the sample values of the independent variable, this interpretation cannot be a meaningful one. For every one thousand dollar of the AGI, the RAID increases by $161 in this linear model. |
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| b. |
When AGI is zero, the RAID is $4680 in this linear model. For every one thousand dollar of the AGI, the RAID increases by $161 in this linear model. |
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| c. |
When AGI is zero, the RAID is $4680 on average in this linear model. Since x = 0 is not included in the sample values of the independent variable, this interpretation cannot be a meaningful one. For every increase of one thousand dollar in the AGI, the RAID increases by $161 on average in this linear model. |
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| d. |
When AGI is zero, the RAID is $468 on average in this linear model. Since x = 0 is not included in the sample values of the independent variable, this interpretation cannot be a meaningful one. For every increase of one dollar in the AGI, the RAID increases by $161 in this linear model. |
AGI : 22, 27, 32, 48, 65, 85, 120
RAID : 9.6, 9.6, 10.1, 11.1, 13.5, 17.7, 25.5
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