Achoices: Total tax liability owed, Adjusted gross income (AGI), Gross income (all income subject to income taxes]

Bchoices: Total personal exemptions, (AGI), Adjustments to (gross) income

Cchoices: Total tax liability owed, Itemized deductions, (AGI)

Dchoices: Taxable income Total personal exemptions Total tax liability owed

E: Taxable income (AGI) Other taxes

F: Other taxes Total personal exemptions Tax credits

G: Tax credits Other credits Tax liability owed

H: Taxable income Total tax liability owed Adjestments to (gross) income

Ch 03: Assignment - Preparing Your Taxes These are not necessarily complete definitions, but there is only one possible answer for each term. Answer Term Gross income Active income Portfolio income Description A. This term includes income from self-employment. B. This is used to offset passive income. C. This term includes wages, salaries, bonuses/commissions, and interest/dividends/alimony. D. This item is taxed at different rates depending on the holding period, E. This term includes income gained from real estate and limited partnerships. 5. Inyestment income is offset with this related expense Passive income Investment expenses Real estate or limited partnership expenses Capital gains Sale of a home 6. This is used to determine tax liability, H. Income from savings accounts, stocks, bonds, mutual funds, options, and futures are included in this term. 1. Using taxable income, it is based on tax tables or tax rate schedules. 3. To qualify for exclusion during this transaction, you must have owned and occupied for two of the five prior years. Taxable income Tax liability Term Adjustments Adjusted gross income Deductions Standard deduction Itemized deduction Exemption Itemized deduction example Capital gains tax categories Answer Description A. These are charitable contributions. B. This is taxed as ordinary income if held less than 12 months. C. Examples of this term include charitable deductions, state and local taxes, and moving expenses. D. This can be claimed If taxpayer provides more than half their support. E. This term equals gross income less adjustments. F. Reduce AGT by the standard deduction and allowable exemptions. G. This can be either standard or itemized. H. Deductions such as employee, personal retirement, higher education, and support expenses are included in this category. 1. This is a blanket deduction that includes various deductible expenses normally incurred by taxpayers 1. This term refers to the result after deducting expenses like alimony paid and self. employment taxes, to name a few. Steps to AGI Steps to taxable income the step from the drop-down fields below. Step A: Determine Adjusted Gross Income Less Step B: Calculate Taxable income Larger of itemized deductions or standard deduction Less Step : Calculate Tax Liability Calculate tax using tax tables or tax rate schedules Sur