discussion 2-1 - Step1:Addupallyourincome.,social .,the Ste

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
To calculate federal income tax liability below steps to be followed : Step 1 : Add up all your income . This income can be W-2 income or 1099-misc income , social  security income or income earned overseas. If you earn income not shown on a W2 or 1099, the  internal revenue service expects you to report it. Step 2: Add up your" above the line deduction" . The above the line deductions are the tax  deductions that all income earners get without itemizing their return without with a schedule A. The  above the line deductions include IRA contribution , student loan interest and alimony. Step 3: determine your adjusted gross income (AGI) . ATI IS simple total income minus above the  line deductions. It is usually last line on page 1 of Form 1040. Step 4 : calculate your taxable income . Taxable income calculated as AGI minus the greater of your standard deduction or itemized deductions. Itemized deduction includes mortgage interest , 
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern