chapter 4 every taxpayer in the United States pays the same tax rate on their ta

Question

chapter 4

every taxpayer in the United States pays the same tax rate on their taxable income. which of the following equations represent the correct formula for computing a taxpayer's taxable income? Check all that apply. Taxable income = Total income-Exclusions. Adjustments to income-Deductions-Exemptions Taxable income = Gross income-Adjustments to income-Deductions-Exemptions Taxable income Adjusted gross income . (Deductions-Exemptions) D Taxable income Total income Exclusions Taxable income Adjusted gross income - Tax credits Taxable income = Total income + Deductions and Exemptions Taxable income = Gross income . Adjustments Taxable income Gross income . Exclusions Which of the following must be included in the computation of a taxpayer's taxable income?

Explanation / Answer

Formula 1st , 2nd and 3rd are the only correct one's.

In order to calculate Taxable income. We start with the Total Income, and once we exclude all the exclusions we get gross income from which we do certain adjustments to arrive at Adjusted Income, from which we further do some tax adjustments due to investments and deductions of income which are exempt from taxes and then we finally end up with Taxable income.

Fist 3 formula's are all kind of same things, but all the remaining formula's are incorrect.

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