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5. Steps to taxable income and tax liability owed What steps should you take when completing a tax return? When preparing a tax return, it is important to complete each step in the order prescribed. Identify each step in completing a tax return by choosing the step from the drop-down fields below. Step A: Determine Adjusted Gross Income A Less B Equals Step B: Calculate Taxable Income Less Larger of itemized deductions or standard deduction Less D Equals E 1 Calculate tax using tax tables or tax rate schedules Less Step C Calculate Tax Liability le WWW-0.JPG 0 IR MacBook Pro & 6 C 6 7 00 8 9 0 || + Step C: Calculate Tax Liability I Calculate tax using ta: Less Plus Equals A Gross income (all income subject to income taxes] B Adjusted gross income (AGI) D E F Tax credits G G H Total tax liability owed