Summary: In this episode, we break down page 1 of the 1040 tax form and explain each section in plain language. We cover everything from personal information to income sources, deductions, and tax credits, so you can better understand how to fill out this important document.
Outline:
- Introduction
- Personal Information: The first section of the 1040 form requires you to provide your name, address, and Social Security number. You also need to indicate your filing status, which can be single, married filing jointly, married filing separately, head of household, or qualifying widow(er).
- Income Sources: The next section asks you to report your income, which can come from various sources such as wages, salaries, tips, interest, dividends, and capital gains. You also need to include any taxable refunds, unemployment compensation, and Social Security benefits you received during the year.
- Adjustments to Income: This section allows you to reduce your taxable income by reporting certain deductions such as contributions to a traditional IRA or student loan interest. These deductions are sometimes called "above-the-line" deductions because you can take them even if you don't itemize your deductions.
- Deductions: The next section asks you to report your itemized deductions, which can include things like mortgage interest, state and local taxes, charitable contributions, and medical expenses. You can choose to take the standard deduction instead of itemizing if it results in a lower tax liability.
- Tax Credits: This section allows you to reduce your tax liability by claiming certain credits such as the Child Tax Credit, Earned Income Credit, or American Opportunity Credit.
- Calculating Your Tax Liability: The final section of page 1 asks you to calculate your tax liability based on your income, deductions, and credits. You can use the tax tables provided by the IRS to determine your tax liability based on your filing status and taxable income.
- Conclusion and Final Thoughts
Winery and Wine Recommendations:
If you're looking for a delicious wine to enjoy while working on your taxes, we recommend the Pudding River Wine Cellars Walla Walla Valley Malbec. This wine boasts bold and juicy flavors of dark fruit and chocolate, with a smooth finish. You can purchase this wine directly from the winery's website at https://puddingriver.com/our_wines/2014-w-v-melbec/
Links/Resources Mentioned:
This episode is brought to you by Rooted Planning Group. Rooted Planning Group is a fee-only financial planning firm that specializes in working with women in their 30s and 40s who want to take control of their finances and plan for the future. Whether you're just starting out or you're looking to make a big change, Rooted Planning Group can help. Visit www.rootedpg.com to learn more.
