J.K. Lasser's Your Income Tax 2015: For Preparing Your 2014 Tax Return

Part 4Personal Tax Computations

In this part, you will learn how to:

• Figure your regular tax. After claiming the standard deduction or itemized deductions (13.1) and deducting your allowable personal exemptions (21.1), you figure your 2014 regular tax by looking up the tax in the Tax Table or by figuring the tax using the Tax Computation Worksheet or special capital gain worksheets (22.1).
• Apply the alternative minimum tax. If you have reduced your taxable income by certain deductions and tax benefits, you may be subject to the AMT (23.1).
• Reduce your tax liability with tax credits. You may be entitled to tax credits (22.7) that lower your regular tax as well as any AMT.
• Figure estimated tax payments. If you have investment and self-employment income, you generally have to pay quarterly estimated tax (27.1).
• Compute the “kiddie tax.” If your child under age 18 has investment income for 2014 exceeding $2,000, you must compute tax on that income as if it were your own. The “kiddie tax” rules also apply if at the end of 2014 your child is age 18 or a full-time student under age 24, unless the child’s earned income for 2014 exceeds 50% of his or her total support for the year (24.2).
• Apply the Additional Medicare taxes. There is an 0.9% additional Medicare tax on earnings exceeding $200,000 if you are single or $250,000 if married filing jointly. Also, if modified adjusted gross income exceeds the $200,000 or $250,000 threshold, a 3.8% additional Medicare tax applies to the lesser ...