Which of the following deductions can be subtracted when calculating adjusted annual income for USDA loans?

When calculating adjusted annual income for USDA loans, dependent deductions for minors living in the household can be subtracted. This deduction acknowledges the financial responsibilities households have for dependent children. By allowing this deduction, the USDA aims to provide a fairer assessment of a household's income, reflecting both the income earned and the costs associated with supporting dependents.

This is particularly important in rural lending where households may be larger and support systems can vary significantly. This approach helps ensure that families with dependents are not unduly penalized in the income calculation, which can affect their eligibility for loans or the amounts they may qualify for.

The other options, while they pertain to household finances, do not directly affect the calculation of adjusted annual income for USDA loans. Mortgage interest paid, credit card payments, and homeowner's insurance costs are generally costs associated with homeownership rather than deductions in this income calculation process. Understanding these distinctions is vital for accurately navigating USDA loan eligibility requirements.