Question

Write the formula for calculating taxable income.

Answer 1

Answer:

taxable income = adjusted income - (deductions + Allowances/Exemptions)

Step-by-step explanation:

Taxable income is the type of income on which a person has to pay tax to the government. Taxable Income is calculated by subtracting the deductions and exemptions from the adjustable income.

With deductions you can either have itemized deductions or standard deductions.

Standard deduction consist of deductions like if a couple is married then they will have the deductions and if there are dependents of a person then he will have a standard deduction.

Itemized deductions consist of mortgages values, medical expenses, charity works etc.

This will help us to find the value of our taxable income