ECON 0110 Lecture Notes - Lecture 10: Taxable Income, Adjusted Gross Income
Document Summary
Individual income tax system: calculate gross income, calculate subtractions, personal exemptions, standard or itemized deductions, calculate adjusted gross income, use marginal tax rates and calculate federal tax. Income taxes are paid on taxable income, not. The most important subtractions are: personal exemptions- a dollar amount based on how many people are in your household, standard deduction- everyone can talk a certain amount on everything. Or: itemized deductions- or you list everything that could be deductible for tax, if this amount is >>>>> the. Standard deduction you subtract the bigger amount: contributions to ira"s- You are permitted to subtract a specified amount from your gross income for each member of your household. In 2015 the personal exemption is ,000 per person. Current max tax rate = 15% for long term. Taxable income = ,000 - ,900 - ,100 = ,000. Step 1: 10% of income from sh to ,925. Step 2: add 15% of income from ,925 to ,250.
