This form is a sample letter in Word format covering the subject matter of the title of the form.
This form is a sample letter in Word format covering the subject matter of the title of the form.
How Income Taxes Are Calculated First, we calculate your adjusted gross income (AGI) by taking your total household income and reducing it by certain items such as contributions to your 401(k). Next, from AGI we subtract exemptions and deductions (either itemized or standard) to get your taxable income.