4. Vocabulary - Terminology for components of taxable income Components to Taxable Income Terminology Match the terms relating to the basic terminology and concepts of personal taxation on the left with the descriptions of the terms on the right. Read each description carefully and type the letter of the description in the Answer column next to the correct term. These are not necessarily complete definitions, but there is only one possible answer for each term. Term Answer Description A. This is a blanket deduction that includes various deductible expenses normally Adjustments E incurred taxpayers. Adjusted gross income B. This is adjusted gross income less deductions and exemptions. C. This term equals gross income less adjustments. Deductions Standard deduction D. This can be either standard or itemized. Itemized deduction Exemption E. Many of these are based on a percentage of AGI. F. This can be claimed if taxpayer provides more than half their support. G. This term refers to the result after deducting expenses like alimony paid and self- employment taxes, to name a few. Itemized deduction example Capital gains tax categories H. These are charitable contributions. Steps to AGI I. Deductions such as employee, personal retirement, higher education, and support expenses are included in this category. J. This figure is based on tax bracket, 5% to 15% tax rate if held over 12 months. Steps to taxable income