#Irs tax tables for 2020 tax year how to#

Taxable income is AGI minus allowable deductions. Under current law, no tax rate applies directly to total income or to AGI.Ī narrower measure of income-taxable income-is the measure of income that is subject to the individual income tax. AGI is typically the measure of income used in the tax code to phase out preferences for higher-income taxpayers. Those adjustments to income include a portion of the self-employment tax, certain contributions to retirement accounts, and interest on student loans. The next-broadest measure is AGI, which is total income minus certain deductions, called statutory adjustments. The broadest measure of income on an individual tax return is total income, which includes income from all sources not specifically excluded by the tax code. Broader measures of income allow for fewer deductions. Individuals are required to calculate three main measures of income on their tax return: total income, adjusted gross income (AGI), and taxable income.

#Irs tax tables for 2020 tax year how to#

The tax code indicates both how to measure income subject to taxation and the tax rates that apply to that income. As specified in the tax code, an individual income tax is imposed on the wages, salaries, investments, and other forms of income that people earn.