Correct Response: A. When an individual files taxes at the end of a fiscal year, they may deduct itemized expenses that include: state and local taxes, gifts to charitable organizations, home mortgage interest, tax preparer's fee, and medical and dental expenses. Individuals are only allowed to deduct interest paid on a home mortgage, and not on personal or car loans (B). Individuals may deduct state and local taxes, but cannot deduct federal income taxes that are withheld, such as Social Security and Medicare taxes (C). The only deduction for interest on a loan is a home mortgage and not on a personal credit card (D).
