Federal Taxable income is the difference of income that you earned and exemptions plus deductions plus adjustments. The amount of federal taxes that you pay depends upon various factors like the gross amount of your salary, other incomes (e.g. bank interests, stock dividend, the filing status (like single, married, household) and the number of dependents (kids, parents) etc.
What is Income?
Income is the amount that your earned during that year. Examples of Income are salary and bonus from your employer, interest from bank, dividend from shares, social security income and unemployment benefits paid by the government are examples of Income.
What is Adjustment?Adjustments are in addition to itemized or standard deductions. Examples of adjustments are Individual retirement account, moving expenses, student loan, fee deductions.
What is Adjustment Gross Income?The difference of income and adjustments.
Please visit http://irs.gov for more information on Federal Tax.
