Tax Formula

Date: Sunday, September 7, 2008
Time: 11 PM
Place: Kitchen

Most individuals compute taxable income using the following tax formula:

Income (broadly conceived)
Less: Exclusions
Gross Income
Less: Deductions for adjusted gross income
Adjusted gross income
Less: the greater of total itemized deductions or the standard deduction
Less: personal and dependency exemptions
Taxable income
Tax on income
Less: Tax Credits
Tax Due

Special provisions govern the computation of taxable income and tax liability for certain minor children who have unearned income in excess of specified amounts.