Roadmap

Question 1

Tax Due

Answer 1

I - TAXABLE IMCOME

• A) Adjusted Gross Income =
  
  • 1 ) Compute Gross Income
  • 2) Subtract “above the line” deductions [those listed in § 62(a)]
• B) MINUS
  
  • 1) Personal Exemptions
  • 2) EITHER
    
    • a) Standard Deduction [§ 63(c)] OR
    • b) Itemized Deductions [§ 63(d)]

II - APPLY TAX RATES = TAX LIABILITY

III - SUBTRACT CREDITS