User:Fyre4ce/Income tax

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Income tax in the United States is a complex and often-misunderstood topic. While the entire US tax code is far too complex to be described in a single wiki article, this page walks readers through the major parts of income tax calculations, and lists the most common types of income, deductions, and credits that will apply to the vast majority of readers. IRS Form 1040 forms the main structure by which income taxes are calculated. Where appropriate, this article will list the lines on Form 1040 related to each section, along with other relevant IRS forms.

Taxable Income
Generally, the IRS taxes all forms of income unless specifically excluded by law, although numerous forms of tax-free income exist. IRS Publication 525 describes the tax treatment of various kinds of incomes. The most common forms are described here.

Fully taxed income
The following types of income are generally fully taxed, and are reported on Form 1040 lines 1-7:

Tax-free income
The following forms of income are generally tax-free to the taxpayer who receives them:

Partially taxed income/special tax treatment
The following forms of income have a special tax treatment, and are either partially taxable and/or taxable at a rate different from ordinary income: