Individual Income Tax Formula
This module begins the discussion of individual income tax. The formula below provides a summary of the calculation of taxable income and federal income tax liability or refund for individuals. Ultimately, these items are reported on the individual income tax return, Form 1040.
Gross income
< Adjustments >
Adjusted gross income
< Standard deduction >
Or
< Itemized deductions > Taxable income before QBI deduction < QBI deduction >
Taxable income
Federal income tax < Tax credits > Other taxes
< Payments > Tax due Or Refund