What's taxable income?

What's taxable income?

John Stoller, CPA (Certified Public Accountant) gives expert video advice on: What do I need to know about taxes?; Who needs to file income taxes?; Why are the tax laws so complicated? and more...

Your income is figured first with total income which is on page one of your return that represents your income from all the items in your return. From that you get to deduct certain things: some student loan interest, some educator's expense, and IRA contributions. Then you arrive at the adjusted gross income. From the adjusted gross income, you deduct the standard deduction or the itemized deductions if they're greater to arrive at a subtotal. From that subtotal, you deduct the exemption credit of $3,000 per exemption. After you have the exemptions taken off, you have your taxable income and then you figure you tax on that amount.