Deductions & Adjustments Worksheet: W-4 Tax Form

Video Transcript

"In this section we are going to locate the deduction and adjustments worksheet. We use this worksheet in our example cause James and Mary are going to itemize there deductions. So for line 1 it says enter estimate of your 2007 itemize deduction. In their case they know that is going to be $12,000. We come to line 2 and it says enter with married filling jointly $10,700. $7,850 if head of household. $5,350 if single or married and filling separately. Well in our example it is $10,700 so we enter that on line 2. We subtract line 2 from line 1 and we get $1,300 on line 3. On line 4 you enter a estimate of your 2000 adjustments to income. In our example this is 0. So when we subtract when we add lines 4 and 3 we get 1300. Enter a estimate of your 2007 non-wage income such as dividends or interest. In our example this is $150 worth of interest. So we subtract that from line 6 and that gives up $1,150. Then on line 8 we are told to divide the amount on line 7 by $3,400 and enter the results here. Drop any fraction. Well when we divide 1150 by 3400 we get 0.33 and since that is a fraction we drop it and enter on line 8. We have already completed the personal allowance worksheet line H page 1 is 1. So we add lines 8 and 9 so we adding 0 and 1 and we enter 1 on line 10. That completes this worksheet."