Question

What are the steps involved in calculating taxable income?

1) Determine gross income, calculate adjusted gross income, subtract deductions, determine exemptions, compute taxable income, calculate tax owed, make tax payments or ask for a refund or credit
2) Calculate adjusted gross income, subtract deductions, determine exemptions, compute taxable income, calculate tax owed, make tax payments or ask for a refund or credit
3) Determine gross income, subtract deductions, determine exemptions, compute taxable income, calculate tax owed, make tax payments or ask for a refund or credit
4) Determine gross income, calculate adjusted gross income, determine exemptions, compute taxable income, calculate tax owed, make tax payments or ask for a refund or credit

Answer 1

The steps involved in calculating taxable income include determining gross income, calculating adjusted gross income, subtracting deductions, determining exemptions, computing taxable income, and calculating tax owed.

Step-by-step explanation:

The correct steps involved in calculating taxable income are as follows:

1. Determine gross income
2. Calculate adjusted gross income
3. Subtract deductions
4. Determine exemptions
5. Compute taxable income
6. Calculate tax owed
7. Make tax payments or ask for a refund or credit

By following these steps, you can accurately calculate your taxable income and determine the amount of tax you owe.