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Income Tax Planning
Chapter 3: Fundamentals of Income Tax/BASIC TAX FORMULA: INDIVIDUALS
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Chapter 3: Fundamentals of Income Tax

BASIC TAX FORMULA: INDIVIDUALS

01.Core Concepts

Basic Tax Formula Income - Deductions = Taxable Income x Tax Rate = Tax Liability Example: • A single taxpayer with income of $35,000 and a standard deduction of $16,100 has taxable income of $18,900 ($35,000 - $16,100 = $18,900). Using the 2026 tax rate schedule for the single filing status, the income tax liability is $2,020.00.