EXHIBIT 16-1 Corporate and Individual Tax Formulas

Individual Tax Formula						 Corporate Tax Formula
Realized income from whatever					 Realized income from whatever
source derived 							source derived

Minus: Excluded or deferred income 				Excluded or deferred income

Equals: Gross income						 Gross income

Minus: Deductions For AGI 					deductions

Equals Adjusted gross income

Minus: From AGI deductions
(1) Greater of:
(a) Standard deduction or
(b) Itemized deductions and
(2) Personal and dependency exemptions

Equals Taxable income 						Taxable income

Times Tax rates 							Tax rates

Equals Regular income tax liability 				Regular income tax liability

Add Other taxes 							Other taxes

Equals Total tax 							Total tax

Minus Credits							 Credits

Minus Pre-payments 						Pre-payments

Equals Taxes due or (refund) 					Taxes due or (refund)

Corporations compute gross income just as other types of business entities