Gross Income is all the income you receive over the course of the year,
including wages, interest, dividends and capital gains.
Adjustments are items eligible taxpayers may deduct from Gross Income. Some examples: Contributions to a qualified IRA, Student Loan
Interest, Tuition and Fees, Some Business Expenses, Moving Costs and Alimony
Payments.
Adjusted Gross
Income, or AGI, takes Gross Income
and subtracts any eligible adjustment.
Deductions are subtractions from AGI.
- The Standard Deduction is a fixed dollar amount determined by your filing status. It is adjusted each year for inflation.
- Itemized Deductions include eligible medical, dental, and vision expenses; state, local and property taxes; mortgage interest; charitable contributions; casualty and theft losses; unreimbursed employee expenses; and other miscellaneous deductions such as gambling losses. Some of these deductions must meet IRS limitation and all must meet IRS criteria. An additional form is required for filing.
Exemptions are the amount you are allowed to subtract from your income to
reflect your filing status and eligible dependent.
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