Individual Taxation
The federal income taxation of individual taxpayers and their filing of personal returns.
REG tests this as a build-the-1040 calculation: the tell is a fact pattern that forces the right ordering, because above-the-line (for-AGI) deductions lower AGI before AGI-based phaseouts and floors apply. Watch the standard vs. itemized choice, the 7.5%-of-AGI medical floor, the SALT cap (raised to $40,000 for 2025–2029 under the One Big Beautiful Bill Act, phasing down above ~$500k income and reverting to $10,000 in 2030 — some older banks still say a flat $10,000), and refundable vs. nonrefundable credits (only refundable ones, like the EITC or the refundable Child Tax Credit portion, can drive a refund below zero). The hinge is usually sequence and phaseout, not the headline number.
The classic trap is confusing this with gross income, the broad starting pool before exclusions and deductions; individual taxation is the full liability computation that follows. Don’t blur it with corporate taxation: a C corp pays a flat 21% entity rate with no standard deduction or filing status, then double taxes dividends. Memory hook: AGI is the gate every later limitation passes through.
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