Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller

Exercise 57

List four sources of income for which an individual might receive W-2 and 1099 forms. (See Objective.)
O BJ E CTIVE 2 Find the adjusted gross income. The first step in finding personal income tax is to find adjusted gross income. Adjusted gross income is the total of all income less certain adjustments. Employers are required to send out W-2 forms showing wages paid, federal income taxes withheld, Social Security tax withheld, and Medicare tax withheld. Other types of income such as interest, dividends, and self-employment income are shown on 1099 forms , which are also mailed to each individual. Sample W-2 and 1099-INT forms are shown on the next page.
Finding adjusted Gross income
Step 1 Add amounts from all W-2 and 1099 forms along with dividends, capital gains, unemployment compensation, and tips or other employee compensation.
Step 2 From this sum, subtract adjustments such as contributions to a regular individual retirement account (IRA) or alimony payments.