1040A Income Section Tips

Video Transcript

"Now we're going to talk about the income section on John and Mary's tax return. On line seven wages salaries and tips. You take the amounts from forms W-2 for both individuals and add them together and you get $101,360.00. The couple also had taxable interest of $150,00 and schedule 1 is not required because this amount is below the $1,500.00 thresh hold. None of the rest apply until we get to line 13 unemployment compensation and Alaska permanent funds and in our example John was out of work for part of the time in 2007 and he had $300.00 worth of unemployment compensation he needs to include in this. So when you add lines 7, 8A and 13, the total income is $101,810.00. Then we go to the adjusted growth income section and educator expenses, Mary was a teacher and she's allowed to deduct $250.00 as an adjustment to gross income because she did have educator expenses that qualified. Nothing is noted here so we add everything from Line 16 through 19 together and it still is $250.00and we deduct that from line 15, so we are subtracting line 20 from line 15 and that amount is $101,560.00 once we've completed that."