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What is the difference between AGI, MAGI, and taxable income?

AGI (Adjusted Gross Income) is the total income you earn in a year minus certain deductions. MAGI (Modified Adjusted Gross Income) is AGI with certain additional adjustments. Taxable income is the amount of income that is subject to taxation after deductions and adjustments.


What is the difference between above the line deductions and below the line deductions?

Above the line deductions are subtracted from a person's gross income to calculate adjusted gross income, while below the line deductions are subtracted from adjusted gross income to determine taxable income.


Whats the difference between tax free income and taxable income?

You pay tax on taxable income and you don't on tax free income


What is the formula for taxable income?

Gross Income - Above the Line Deductions = Adjusted Gross Income - (Deductions +Exemptions)= Taxable Income


What is the formula for calculating taxable income?

Gross Income - Above the Line Deductions = Adjusted Gross Income - (Deductions +Exemptions)= Taxable Income


Describe the diffferences between financial statement income and taxable income?

There is some difference in financial statement income as well as taxable income as in financial statement income there are items which are not allowed by tax authorities and main item is depreciation. Other factors are that tax is deducted on income which is received while in financial statement income included revenue which is not received or accrual items that needs to be adjusted as well that's why financial statement income and taxable income is not same.


What is difference between tax free and taxable income?

You don't pay tax on the tax-free pay and you do pay tax on taxable income


What is the difference between gross income net income and taxable income?

Gross income is the raw income earned while net income is after deductions of interest taxes while taxable income is that income on which tax is calculated.


What is the adjusted gross income before or after the standard deduction?

Adjusted gross income is calculated before the standard deduction is applied. The standard deduction is then subtracted from the adjusted gross income to determine the taxable income.


All taxable income less IRS allowable adjustments to income is called?

Adjusted gross income


What is income taxable and how do you find out how much you owe?

Taxable income is described as gross income or adjusted gross income minus any deductions or exemptions. Taxable income can also come from appreciated assets that have been sold or capitalized in that tax year.


Difference between income tax act and income tax rule?

The income tax act focuses its concern on total income and the income tax rule focuses on which types of income are taxable. That is the biggest difference between the two.