Instructor%20Notes%20-%20Individual%20Income%20Tax

Instructor%20Notes%20-%20Individual%20Income%20Tax -...

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Management 200T Individual Income Tax TITLE 26 , Subtitle A , CHAPTER 1 , Subchapter B , PART I , Sec. 61 General definition Except as otherwise provided in this subtitle, gross income means all income from whatever source derived , including (but not limited to) the following items: (1) Compensation for services, including fees, commissions, fringe benefits, and similar items; (2) Gross income derived from business; (3) Gains derived from dealings in property; (4) Interest; (5) Rents; (6) Royalties; (7) Dividends; (8) Alimony and separate maintenance payments; (9) Annuities; (10) Income from life insurance and endowment contracts; (11) Pensions; (12) Income from discharge of indebtedness; (13) Distributive share of partnership gross income; (14) Income in respect of a decedent; and (15) Income from an interest in an estate or trust. The U.S. Government taxes WORLDWIDE INCOME. This is a commonly misunderstood concept.
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Management 200T Individual Income Tax There are items that are specifically INCLUDED in gross income. Alimony Prizes and Awards (Lottery/Gambling winnings) Reimbursements for moving expenses Social Security income There are also items that are specifically EXCLUDED from gross income. Gifts and inheritances Interest on State and Local bonds Qualified Scholarships The overall general format to your individual taxes is the following: Gross Income XXX,XXX Adjustments to Gross Income (XXX,XXX) Adjusted Gross Income XXX,XXX Standard/Itemized Deduction ( X,XXX) Personal Exemption(s) ( X,XXX) Taxable Income XXX,XXX Tax Rate/Schedule Income Tax XX,XXX Tax Credits ( X,XXX) Overpayment/(Balance Due) X,XXX
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