IRS Publication 17 — Your Federal Income Tax (Individuals)

Part Four.

Figuring Your Taxes, and Refundable and Nonrefundable Credits The two chapters in this part explain how to figure your tax. They also discuss tax credits that, unlike deductions, are subtracted directly from your tax and reduce your tax dollar for dollar. The Form 1040 and 1040-SR schedules that are discussed in these chapters are:

• Schedule 1, Additional Income and Adjustments to Income;

• Schedule 2, Additional Taxes; and

• Schedule 3, Additional Credits and Payments. 13.

How To Figure Your Tax Introduction After you have figured your income and deductions, your next step is to figure your tax. This chapter discusses:

• The general steps you take to figure your tax,

• An additional tax you may have to pay called the alternative minimum tax (AMT), and

• The conditions you must meet if you want the IRS to figure your tax.

Useful Items You may want to see: Publication 503 Child and Dependent Care Expenses 505 Tax Withholding and Estimated Tax 525 Taxable and Nontaxable Income 531 Reporting Tip Income 550 Investment Income and Expenses 560 Retirement Plans for Small Business (SEP , SIMPLE, and Qualified Plans) 575 Pension and Annuity Income 596 Earned Income Credit (EIC) 926 Household Employer’s Tax Guide 969 Health Savings Accounts and Other Tax-Favored Health Plans 970 Tax Benefits for Education 974 Premium Tax Credit (PTC) 503 505 525 531 550 560 575 596 926 969 970 974 Form (and Instructions) W-2 Wage and Tax Statement Schedule R (Form 1040) Credit for the Elderly or the Disabled Schedule SE (Form 1040) Self-Employment Tax Schedule 8812 (Form 1040) Credits for Qualifying Children and Other Dependents 1116 Foreign Tax Credit 3800 General Business Credit 4136 Credit for Federal Tax Paid on Fuels 4970 Tax on Accumulation Distribution of Trusts 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts 5695 Residential Energy Credits 5884 Work Opportunity Credit 8396 Mortgage Interest Credit 8801 Credit for Prior Year Minimum Tax—Individuals, Estates, and Trusts 8835 Renewable Electricity Production Credit 8839 Qualified Adoption Expenses 8846 Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips 8853 Archer MSAs and Long-Term Care Insurance Contracts 8880 Credit for Qualified Retirement Savings Contributions 8889 Health Savings Accounts (HSAs) 8910 Alternative Motor Vehicle Credit 8912 Credit to Holders of Tax Credit Bonds 8936 Clean Vehicle Credits 8959 Additional Medicare Tax 8960 Net Investment Income Tax—Individuals, Estates, and Trusts 8962 Premium Tax Credit (PTC) W-2 Schedule R (Form 1040) Schedule SE (Form 1040) Schedule 8812 (Form 1040) 1116 3800 4136 4970 5329 5695 5884 8396 8801 8835 8839 8846 8853 8880 8889 8910 8912 8936 8959 8960 8962 Figuring Your Tax Your income tax is based on your taxable income. After you figure your income tax and AMT , if any, subtract your tax credits and add any other taxes you may owe. The result is your total tax. Compare your total tax with your total payments to determine whether you are entitled to a refund or must make a payment.

This section provides a general outline of how to figure your tax. You can find step-by-step directions in the Instructions for Form 1040. Tax. Most taxpayers use either the Tax Table or the Tax Computation Worksheet to figure their income tax. However, there are special methods if your income includes any of the following items.

• A net capital gain. See Pub. 550.

• Qualified dividends taxed at the same rates as a net capital gain. See Pub. 550.

• Lump-sum distributions. See Pub. 575.

• Farming or fishing income. See Schedule J (Form 1040).

• Tax for certain children who have unearned income. See Form 8615.

• Parent’s election to report child’s interest and dividends. See Form 8814.

• Foreign earned income exclusion or the housing exclusion. (See Form 2555, Foreign Earned Income, and the Foreign Earned Income Tax Worksheet in the Instructions for Form 1040.) Credits. After you figure your income tax and any AMT (discussed later), determine if you are eligible for any tax credits. Eligibility information for these tax credits is discussed in other publications and your form instructions. The following items are some of the credits you may be able to subtract from your tax and shows where you can find more information on each credit.

• Adoption credit. See Form 8839.

• Alternative motor vehicle credit. See Form 8910.

• Child and dependent care credit. See Pub. 503.

• Child tax credit. See Schedule 8812 (Form 1040). 106 Chapter 13 How To Figure Your Tax Publication 17 (2025)