Income Tax Report

[Kathleen Reynolds]

#4621

The Income Tax tab shows a detailed list of what is taken into account to calculate the tax due from the gross income when the trust is taken into account. Complete the Tax Assumptions worksheet before consulting with the results in the Income Tax tab. The program performs an exact tax calculation for the year referenced on the Tax Assumptions window. For future years, the program uses the entered inflation rate to estimate the income tax. Each year, Brentmark Software updates the program with more current tax brackets.

The following figures are used to calculate the tax due:

• Adjusted Gross Income (AGI): The number represents the Gross Income minus any allowable adjustments. The program automatically takes this value from the Tax Assumptions worksheet.
• Deductions: Includes any items that reduce income. The program automatically adds the Itemized deductions (from the Tax Assumptions) and the Charitable deductions (from the Summary Report tab), and then displays them on the report.
• Adjusted Personal Exemptions: The program adds the Personal Exemptions and the Personal Exemptions Phaseout.
• Taxable Income: The net income after claiming all deductions. The program takes the sum of the Deductions and the Adjusted Personal Exemptions and subtracts the total from the Adjusted Gross Income.
• Tax Due: The amount appears on the current Income Tax Table.
• Average Tax Rate: This is the percentage of the Adjusted Gross Income that is taxed.
• Marginal Tax Rate: The amount appears on the current Income Tax Table.
• Regular Standard Deduction: The program uses the designated deduction for the current year.
• Additional Elderly Deduction: The program uses the designated deduction for the current year.
• Standard Deduction: The program adds the Regular Standard Deduction and the Additional Elderly Deduction.
• Itemized Deductions: Includes items such as interest, state and local taxes, charitable contributions, and medical deductions.
• Charitable Deduction: The program takes this number from the Summary Report Tab.
• Deduction Phaseout: The program adds the Itemized Deductions, the Charitable Deduction, and the Deduction Phaseout.
• Personal Exemptions: The program automatically enters the exemption that is given to every taxpayer that is not considered a dependent.
• Personal Exemption Phaseout: The program automatically enters the exemption that is given to high income tax payers.
• Adjusted Personal Exemptions: The program adds the Personal Exemptions and the Personal Exemptions Phaseout

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