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Total per adjusted gross income concept# Total home mortgage interest' Medical and dental expense deduction' Net casualty or theft loss deduction Taxes paid deduction+ Net limited miscellaneous deductions per# adjusted gross income concept' Non-limited miscellaneous deductions#Excess of exemptions and deductions over adjusted gross incomeTaxable incomeTax at regular ratesIncome tax before credits Tax credits: Total Child care credit Minimum tax credit Foreign tax credit General business creditForeign taxes paid3 Foreign taxes paid on excluded foreign-earned income (Form 1116)!Taxable income which would yield: Income tax before credits Income tax after credits'Reconciliation of adjusted gross income and expanded income:4 plus: Total tax preferences excluded from 8 Social Security benefits (nontaxable)2 Foreign-earned income exclusion3 minus: Investment interest expense deduction7 Non-limited miscellaneous deductions: Unreimbursed employee business expenses' Total per expanded income concept( Total per expanded income concept"Alternitve minimum tax (Form 6251)%Alternitve minimum tax (Form 6251)& & & Adjusted gross income concept! Nondeductible rental loss adjusted gross income0 (excluding tax-exempt interest from private  activity bonds) adjustment)(Adjusted gross income concept--continuedEquals: Expanded incomeExpanded income concept"Expanded income concept--continued8NOTE: Detail may not add to totals because of rounding.(Partnership and S corporation net incomeDividends (post May 5th)Worldwide income tax Worldwide income tax/ after section 179 property deduction: [1]/ adjusted gross income [2]][2] Includes tax-exempt interest and tax preference items subject to alternative minimum tax.�[1] Section 179 of the Internal Revenue Code permits certain taxpayers to elect to deduct all or part of the cost of certain qualifying property in nthe year they place it in service, instead of taking depreciation deductions over a specified recovery period.TSource: IRS, Statistics of Income Spring 2006 Bulletin, Publication 1136, July 2006.oTable 6.--Individual High-Income Tax Returns With and Without Worldwide Income Tax 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