Archive for income tax

Adjusted Gross Income (AGI)

For United States individual income tax, adjusted gross income (AGI) is total gross income minus specific reductions.[1] Taxable income is adjusted gross income minus allowances for personal exemptions and itemized deductions. For most individual tax purposes, AGI is more relevant than gross income.

Source: Wikipedia

Tax Filing adjusted gross incomeThese deductions reduce AGI.  Amounts deductible against gross income in arriving at adjusted gross income (AGI) are called “above-the-line” deductions.

  • Educators Expenses – Teachers’ Classroom Expenses
  • Business Expenses for Certain Employees
  • Health Savings Account Deduction
  • Moving Expenses
  • Self-Employment Tax
  • Self-Employed SEP, SIMPLE, and Qualified Plans
  • Self-Employed Health Insurance
  • Penalty on Early Withdrawal of Savings
  • Alimony Paid
  • IRA Deduction
  • Student Loan Interest
  • Tuition and Fees
  • Domestic Production Activities

Schedule A – Itemized Deductions

If the total of a taxpayers itemized deductions is greater than standard deduction for the applicable filing status, Schedule A should be used.

Here is a summary of deductions which are itemized on Schedule A

  • Medical and Dental Expenses
  • Taxes Paid
  • Interest Paid
  • Investment Interest Expense
  • Interest – Mortgages
  • Points – Mortgages
  • Other Mortgage Interest
  • Gifts to Charity
  • Casualty and Theft Losses
  • Job Expenses and Most Other Miscellaneous
  • Work-Related Education Expenses
  • Legal Fees

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