Chapter 4- Individual Income Tax Overview, Dependents, and Filing Status

Chapter 4- Individual Income Tax Overview, Dependents, and Filing Status

1. Exclusions

   • Realized income items that taxpayers permanently exclude from taxation

2. Deferrals

   • Realized income items that taxpayers include in gross income in a subsequent year

3. Gross income - for AGI deductions = AGI

4. AGI - from AGI deductions = taxable income

5. 3 types of tax prepayments

   • Withholdings
   • Estimated tax payments the taxpayers makes for the year
   • Tax that the taxpayer over paid on the prior-year tax return that the taxpayer elects to apply as an estimated payment for the current tax year