adjustments to income standardized and itemized deductions

Paying your taxes isn’t something that is optional, but one area where you do have a choice is how you decide to approach your tax deductions. After determining your total income, adding up all the sources of income and subtracting any adjustments to income, you will need to decide which deduction option to choose.

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Taxable income

The concept of taxes seems like a pretty easy thing to explain, except when you start looking at it more closely. A ‘tax’ is money that the government collects within its borders in order to pay for everything that government does. Americans work for money, their income, and the government takes a portion of that income as tax. That should be simple, but what counts as income? How much income you make directly impacts how much you pay in taxes, so it’s important to know what the government qualifies as income. It’s time to understand how our tax system really works when it comes to taxable income and adjustments to income.  

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