You can reduce your gross income by taking "above-the-line" deductions. These are available even if you don't itemize.
Calculating your income tax involves a multi-step process that transforms your total earnings into a final amount owed or a refund. For the 2026 tax year, recent legislation like the One, Big, Beautiful Bill (OBBB) has permanently set tax rates while adjusting brackets and deductions for inflation. 🏗️ Step 1: Calculate Your Gross Income calculate your income tax
Start by adding up every dollar you earned throughout the year. This is your "raw" income before any reductions. You can reduce your gross income by taking
: Wages, salaries, tips, and bonuses from your job. For the 2026 tax year, recent legislation like
: Interest from bank accounts, dividends from stocks, and capital gains from selling assets.
: Rental income, gambling winnings, and distributions from retirement accounts. 📉 Step 2: Determine Your Adjusted Gross Income (AGI)