Deduction for qualified higher education expenses (2005 only)
Educator expenses (2005 only)
Archer medical savings account deduction
Savings early withdrawal penalties
Retirement plan contributions--IRAs, Keoghs, SEP,
SIMPLE, etc.
Self-employment tax (50 pecent)
Self-employed health insurance
Health Savings Account (HSA) deduction
Moving expenses
= Equals =
Adjusted gross income
(AGI)
- Minus -
Standard deduction
or
Itemized deductions (may be limited based on
AGI)
Qualified mortgage interest, investment interest
Charitable contributions
Casualty and theft losses
State and local income tax or state and local sales tax
Medical expenses over 7.5% of AGI
State and local real estate and property tax
Miscellaneous itemized deductions (generally must
exceed 2% of AGI)
- Minus -
Personal exemptions (may be limited based on
AGI)
= Equals =
Taxable income
Calculate tax from tax table or tax rate schedules
(and calculate Alternative Minimum Tax (AMT) if
applicable).
Use Schedule D to calculate maximum tax on capital
gains and qualifying dividends* if appropriate.
- Minus -
Available credits
Elderly/disabled
Earned income
Child tax credit
Child and dependent care
Adoption
Retirement savings "savers credit"
Education
Foreign tax
= Equals =
Income tax liability
*
The Jobs and Growth Tax Relief Reconciliation Act of
2003 and the Tax Increase Prevention and Reconciliation Act of 2005 provide that qualifying dividends paid to
individuals by U.S. (and qualified foreign) corporations
will be taxed as capital gains. This change applies to
dividends received in 2003 through 2010. Previously
dividends were taxed at ordinary income rates. Absent
further legislative action, qualifying dividends will
again be taxed as ordinary income beginning in 2011.
Prepared by Broadridge Investor Communication Solutions, Inc, Copyright 2011