| Gross income
|
- Salary
- Commissions
- Bonuses
- Business income
- Up to 85% of Social Security income
- Farm income
|
- Alimony received
- Unemployment income
- Capital gains or losses
- Dividends
- Taxable interest
|
- Rental property income
- Taxable distributions from IRAs and retirement plans
- S corporation and partnership income
- Trust and estate distributions
- Royalties
|
| - Minus -
|
| Adjustments to income
|
- Alimony paid
- Student loan interest
|
- Savings early withdrawal penalties
- Self-employed SEP, SIMPLE, and qualified plan contributions
|
- Self-employment tax (50 pecent)
- Self-employed health insurance
- Health Savings Account (HSA) or Archer MSA Account deduction
- Moving expenses
- IRA deduction
|
| = Equals =
|
| Adjusted gross income (AGI)
|
| - Minus -
|
| Standard deduction
|
| or
|
| Itemized deductions
|
- Qualified mortgage interest, investment interest
- Charitable contributions
- Casualty and theft losses
|
- State and local income tax or state and local sales tax
- Medical expenses over 7.5% of AGI
|
- State and local real estate and property tax
- Miscellaneous itemized deductions (generally must exceed 2% of AGI)
|
| - Minus -
|
| Personal exemptions
|
| = Equals =
|
| Taxable income | Calculate tax from tax table or tax rate schedules (and calculate Alternative Minimum Tax (AMT) if applicable). Use Schedule D to calculate maximum tax on capital gains and qualifying dividends if appropriate.
|
|
| - Minus -
|
| Available credits
|
- Elderly/disabled
- Earned income
- Child tax credit
|
- Child and dependent care
- Adoption tax credit
- Retirement savings "savers credit"
|
- Education tax credits
- Foreign tax
- Energy tax credits
|
| = Equals =
|
| Income tax liability
|
