Personal Income Tax Calculation
IRS Form 1040 summarizes your tax information for the year—Some numbers come from additional forms called “Schedules”
All Income is everything that you received during the year. Some income, such as tax-free gifts, is excluded, which is why Total Income can be less than All Income.
Losses reduce your Total Income
- Business losses (Schedule C)
- Capital losses (Schedule D)
- Farm losses (Schedule F)
Deductions for AGI reduce your Adjusted Gross Income
- Educator expenses
- Health savings account deduction (Form 8889)
- Moving expenses (Form 3903)
- Self-employment taxes (Schedule SE)
- Self-employed retirement plans and health insurance
- Alimony
- IRA (Individual Retirement Account) contributions
- Student loan interest
- Tuition and fees (Form 8917)
Deductions from AGI reduce your Taxable Income
Standard deduction or itemized deductions (Schedule A):
- Medical and dental expenses*
- Local taxes and property taxes
- Mortgage interest (Form 1098)
- Gifts to charities
- Casualty and theft losses (Form 4684)
- Job expenses (Form 2106)
* If greater than 7.5% of AGI
The above information shows common tax items and is not intended to be a complete reference. Consult with your tax professional for further assistance.
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