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Form 1040 - YouTube
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so we are now going to look at the form
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1040 we've covered the 1040 EZ and the
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1040 a this is just a plain form 1040
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the main difference between the 1040 and
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the 1040 a for our purposes in this
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class and a quick introduction of taxes
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is that the 1040 allows us to use the
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schedule a which we just completed in
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our prior video for itemizing deductions
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since we've already been working of her
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rebook minder and seeing his address
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before i've already filled all of that
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in likewise I have filled in his social
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security number and the spouses social
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security number for this class we have
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said that all married couples will be
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doing married filing jointly we're only
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going to that level of death it's the
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most common and filing separately is
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generally fairly complex um all right
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moving on looking at exemptions they're
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asking if yourself which in this case of
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course would be her reasons he is listed
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first can someone claim him as a
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dependent
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well we already looked at his w-2s in
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the prior video and we'll look at them
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again if he's making $65,000 a year
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clearly he's no longer dependent upon
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his family and indeed we're assuming
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this as a married couple that is
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independent so we're going to mark with
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him and the spouse because no one can
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claim them as a dependent in fact we're
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going to look at additional dependents
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one of which is the son with a fake
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social security number here and one of
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which is in fact the mother and right
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this would probably be the mother of
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Sarah since it has a different last name
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all right let's move on over here
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they're asking is the number of boxes
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checked on 6a and 6b well they are both
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independent so we are going to call that
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number 2 of course that will always only
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be 0 1 or 2 number of children who live
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with them we're seeing they're married
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let's go ahead and mark up as a 1
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because clearly Tommy is living with
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them even if he is a college student as
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long as he lives with them and it only
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goes to college and returns every break
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and/or summers that would still apply so
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we're not going to look at them being
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separated the child that is in terms of
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divorce here is a very interesting one
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to be very careful with
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dependence on 6e meaning the section
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here who are not entered above well in
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this case the mother is not already
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listed as a child for obvious reasons
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and so therefore she would be a
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dependent 900 above nice part here add
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the numbers on the lines above we have
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two plus one plus one that gives us four
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very important remember this number we
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will come back to these exemptions it in
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a little bit so this is the total number
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of exemptions on the back page they will
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ask for us or this hub is number four
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all right let's go take a quick look
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again at our w-2s I forgot to open up
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the calculator because what we're going
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to do here quickly is add up the incomes
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again for both of them or for those who
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did not see the prior video you'll see
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that we'll add the wages tips and other
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compensation from box one plus we have
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to look at that same number for her B's
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other w-2 because we have him working
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two different jobs so one seven two two
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zero zero so his income is sixty-five
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thousand two hundred twenty again this
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is his taxable income the social
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security wages were higher because he
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had a retirement contribution to help
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lower his taxable income so six five two
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two zero we're going to go back to our
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1040 and six five two to zero we're not
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to put any pennies over here taxable
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interest well we have to take a quick
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look again for our purposes we said
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we're not going to use any it says
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attach another schedule or see
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instructions we won't worry about that
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but we will take a quick look at a
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taxable interest form it's actually
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fairly straightforward it's actually
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called an interest income form and we've
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looked at a couple of 1099s in class
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1099 - int is pretty straightforward and
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unfortunately this little graphic just
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showed up in front of my box one but
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notice it's the only number on the
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entire page and behind this box you can
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see starts to say interest it'll say
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interest income exactly like it says on
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the
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on the tax form of course being a little
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bit silly here like calling it the bank
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of cheese self but you'll see all his
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personal information the bank's ID
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number and his social security number
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without the - oops alright let's go back
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to his so 25 dollars and four cents
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which will be 25 dollars
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we'll go and Mark in the 25 dollars tax
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exempt interest again we're not going to
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do a special scenario ordinary dividends
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let's take a quick look at an ordinary
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dividends form so it's also a 1099 but
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ah dividends div again we're only going
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to use for our purposes total ordinary
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dividends but the nice part is that's
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the exact words here so we come from a
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bank or an investment fund company or a
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few other variations to $800 total
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ordinary dividends looking on the form
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we see ordinary dividends make sense the
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total ordinary should be pretty straight
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forward we had $800 there you might have
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seen on that form the next box was
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qualified dividends but that gets weird
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we're not going to go there as we skip
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down we can see like self-employment
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income might go in here some other
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things about retirements and pensions
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the one we should watch for for our test
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purposes is unemployment compensation
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there might be an unemployment might say
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he made $3,000 unemployment between
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those two jobs during the course leave
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that is a possibility
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all right but for now since there's no
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other references to income we're just
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going to go ahead and literally read
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what they tell us here combine the
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amounts for through line seven through
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21 which basically means just add them
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up so we can quickly take our 65 220
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plus 25 plus 800 and we'll have our six
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six zero four five now we might possibly
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have a deduction in this area the main
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ones we might see is if he was a teacher
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he might have educator expenses this can
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be up to $250 if many teachers spend
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their own money and don't get reimbursed
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for so that could be considered a
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deduction
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a common one if a person does not
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have a 401k they might actually do a
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personal IRA deduction which is for
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retirement the two you will want to look
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for in the next few years once you start
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paying your student loans back that deep
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interest is often deductible there's
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some minor caveat so that you can read
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about or use the tax software to verify
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it but that might be is something that
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would actually deduct from your income
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likewise potentially if you're working
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almost full time or full time some of
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the tuition you pay in the next few
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years may also be a deduction to your
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income in this case we're going to leave
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these all blank I'm not going to list
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anything there for you write down one or
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two of the questions in the book did but
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simply we would add these up because it
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says here add lines 23 to 35 wealth or L
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0 that's a 0 of course here subtract
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line 3622 well any number minus 0 is of
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course that same number now very
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interesting on the backside the very
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first thing they ask is to enter the
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amount from line 37 which of course is
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just carrying that number from the front
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to the back as taxes become more and
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more done through electronic software
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those become less of an issue we did not
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mention them being born before 1950
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however we see they have a child who's
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still living at home so we are going to
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assume in fact this will be more closely
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a test we're not not going to have them
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being older than 65 years old so here's
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the big big thing we need to really look
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for itemized or standard deduction they
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are married filing jointly so we can
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look off inside this the really
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important thing to look for look off to
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the side for the standard deduction the
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standard deduction for married filing
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jointly is twelve thousand four hundred
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dollars but if we go back to the 1040
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sorry the schedule a which we did on a
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prior video for them we will see that we
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looked at all of their various
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deductions and they came up with fifteen
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thousand nine hundred sixty-five dollars
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well that is larger than the twelve
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thousand four hundred so we're going to
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go enter this
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number on line 40 let's go ahead and 1 5
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9 6 5 try and remember the number 1 5 9
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6 5 just double check okay so now that
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is one of the that's one the first big
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ones to really be careful and watch for
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subtract line 40 from 38 once again we
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go grab that calculator and we're going
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to take the what they call the adjusted
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gross income which you probably use on
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your forms for getting financial aid
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we're now going to subtract one five
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nine six five that itemized it's going
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to lower their taxable income so at this
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point we now have fifty thousand and
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eighty dollars exemptions what is that
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again
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and by the way if this line is less than
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that which it is we're going to multiply
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three thousand nine hundred fifty by the
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number on six D oh we said we're going
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to look at that number again let's go
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back to six D and there it is it's
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number six ABC and D D was the total
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number of exemptions which is four so we
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will take that four times three thousand
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nine hundred and fifty and we can go in
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closer basically it's just under sixteen
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thousand three nine five zero times four
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so I got our fifteen thousand eight
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hundred in exemptions the taxable income
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well that's going to be just subtracting
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line 42 from 41 make sure we just pass
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the taxable income and not get stuck
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there so we take our fifty thousand and
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eighty minus fifteen thousand eight
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hundred we're going to do a little trick
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here and we're going to subtract a fifty
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thousand and eighty realizing that it's
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obviously not the negative number but we
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know that is our three four two eight
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zero you can stop and watch the video
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again quickly on that if that was
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confusing to B you might be able to
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recognize that trick there tax now we
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have to go to our tax table tax table as
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the big thing we're not going to worry
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about this
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for the purposes of our introductory
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test three four two eight zero married
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filing jointly let's go to our tax
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tables and looking for thirty four
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thousand two hundred and eighty dollars
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thirty four thousand whoops so we have
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thirty four thousand and just to double
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check here
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two hundred and eighty so that two
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hundred and eighty is between these two
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here now if we scroll up quickly just
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remind ourselves the first call on the
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single second one is married filing
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jointly which is what our couple is
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doing for our family for two three four
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the amount of tax that they will pay for
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this year or for last year technically
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because they're going for taxes for that
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year is four thousand two hundred and
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thirty four dollars we're not going to
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fuss with alternative minimum tax again
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earn enough actually for its fourth
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anyhow so the add lines 44 45 and 46
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actually underneath this one as well
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realize they're both going to be zero
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will get the same number foreign tax
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credit all these different credits not
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really going to apply for our particular
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situation as a hint we are intentionally
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making our child 17 or older so that
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this is not applied to make it a little
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more complicated but you can see there
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are various credits including education
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credits retirement saving contributions
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if you're putting money aside for
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retirement and are on a lower side of
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the income scale there's some benefits
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there for now we're going to include
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none of those and there'll be none of
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them none of these listed in the test
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therefore you know that when you add
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lines 48 to 54 adding bunch of zeros
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will be 0 subtract line 55 from 47 the
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nice part is take any now or minus 0
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oops and we're good to go you can look
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some of these over for future but
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actually we're not going to look at any
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of these for now self-employment tax
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makes sense there's some taxes on that
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health care something probably covering
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in future classes as it's now becoming a
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big deal but for now they're going to
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very bottom of this section called other
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taxes added lines 56 through 62 you'll
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see none of them listed on
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the test for what we'll be doing there
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we go now we need to find our federal
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income tax withheld from the w-2s and
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1099s of our test they will only be
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taxes withheld on the w-2s let's go back
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to her B's and by the way federal income
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tax will be boxed too so quick aside on
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the dividends federal income tax
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withheld it would have been here had it
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been on the 1099 all right same thing
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here there's also an opportunity for
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here federal income tax withheld notice
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those are both blanks so the only ones
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we have to worry about is whoops federal
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income tax withheld 986 point 36 will
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clear the sound 986 point 36 and the
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reason I'm going to add to that is
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because we may we remember that he had
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two w-2s two three four nine point four
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nine we'll add that together we do add
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them together before we start our
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rounding three three three five point
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eight five so we're going to make that
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three three three six ones that correct
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get the right one three three three six
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alrighty we will see along here we're
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not going to have anything else you can
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read about those if you're curious so
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therefore as they ask they have these
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and these and these excetera et cetera
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our only payments towards our taxes for
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our hypothetical people here will in
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fact be what comes out of the w-2 now
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it's time to see do they get a refund or
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do they owe
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if line seventy four is more than sixty
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three let's take a look here seventy
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four and whoops I'll have to put a note
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in there sorry I actually added the
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wrong number there I wrote the wrong
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number down because we were supposed to
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add them all and then did include the
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prior tax now looking at line seventy
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four more than 63 is it no it's not so
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therefore since it's not sure we're
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going to move on from the refund section
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to the section on owing so now we
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subtract line 74
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from there four two three four
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- three three three six and we can see
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that our individual hero's 898 dollars
[940]
be sure of course a kind of sign on
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behalf of Herbie and its wife but at
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this point we're good to go
[946]
had this been a refund there might be a
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routing number and an account number for
[951]
you to have the deposit go directly to
[954]
either their checking or savings account
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which would get their money a lot faster
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to them so hopefully this helps and kind
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of review it again and definitely kind
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of watch for my mistake here what I
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initially forgot to include 9:56 all
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right good luck
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