How does one find the earnings to subject tax?

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Expert Solution

Answer-Determine your filing status

First, determine your filing status. If you are married, your best option is usually to file jointly. If you file your taxes jointly with your spouse, you are required to add all of your income together to determine the total. You can combine your deductions, and you pay your taxes jointly.

Consider your types of income

The IRS requires you to report all of your income. This includes your side income, interest income, and other income on top of what you might have earned from wages and tips. All of this income is reported directly on your Form 1040 or Schedule 1.

Calculate deductions and taxable income

The next question you should be asking yourself is “How do I figure my taxable income?” This step will help you find your taxable income, after deductions.

Once you report all of your income on your Form 1040 and Schedule 1, you will then have the chance to adjust your income on Schedule 1.

Using Schedule 1, you may be able to reduce your income with the help of contributions to a traditional IRA, student loan interest, self-employment deductions, and other expenses. Adding these up on line 22 of Schedule 1 gives you the total adjustments. Your Adjusted Gross Income (AGI) is then calculated by subtracting the adjustments from your total income.

ekkarill92 answered 5 months ago

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