Accounting Mystery Tip

Formula for Federal Income Taxes on the Individuals: 

1. Income - Exclusions = Gross Income
2. Gross Income - Certain deductions = Adj. Gross Income
3. Adj. Gross Income - greater of personal/employee deductions (itemization) or standard deduction - Personal and dependency exemptions = Taxable Income
4. Tax on Taxable Income (Rate Schedule) - Tax Credits = Final Tax Bill Due