This form is used when you file your taxes.
It allows you to report both your deductions and your AGI otherwise called Adjusted Gross Income, to arrive at the amount that you will have to pay in taxes or the amount that you should get back in a refund.
In some cases, you will have to add forms for different sorts of income.
These are wages, social security, salary, tips, interest, alimony, capital gains, pension payments, farm income, and other sorts of income. The section for more types of income is on the form, as well. This is reported on the first page, and all of the amounts of taxable income added together are "Total Income."
There are adjustments allowed and they are on the second page.
The way to get to your AGI has a variety of deductions or allowances such as tuition and fees, half of your self-employment tax payments, IRA deduction, Self-employed health insurance deduction, student loan interest deduction, moving expenses, and more.
Some will require an additional form for the specific deduction.
You add all of the amounts together and that number is your AGI.
At this point, you should decide whether to use the Standard Deduction or the Itemized deduction.
It is best to do both on a worksheet and decide which will be a better benefit for you.
Then when you have done that you can lower your tax burden more by claiming an exemption for yourself and for those who you will claim.
These include Self-employment tax (Schedule SE), unreported social security and Medicare tax from Form 4137 or 8919, Additional tax on IRS's, etc..
There are several that you can see on the Form 1040.
Some of them are Non-taxable combat pay election, additional child tax credit, federal income tax withheld from forms W-2 and 1099, etc..
Subtract the total amounts of your deductions/ allowances from your income and find your place in the tax world of whether to pay or to get a refund from the IRS.
There are Tax Companies that can do a lot of this online for you though some of you could do it yourselves if you want to focus on the task a bit more.
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