 Income tax 2021-2022 tax software example student loan interest deduction. Get ready to get refunds to the max diving into income tax 2021-2022. Lassert tax software you don't need tax software to follow along but you might want to have the form 1040 which you can find on the IRS website at irs.gov irs.gov. We have our starting point that being the single filer Adam Smith livid and Beverly Hills 90210 100,000 at the W2 income 12,550 for the standard deduction for the single filer 87,450 at the taxable income mirroring that over here in our income tax formula 100,000 12,550 that gives us the 87,450 going back on over to the tax form to see the tax calculation page two we see it at the 1515 using the software to do the calculation plug it into the working 15015 on the tax count going back on over page one we're focused in on the adjustments to income schedule one let's open up that schedule one schedule one page numero dose that's number two number two page going into that one so part number two and we're looking at the student loan interest student loan interest being down here on number 21 so usually a fairly straightforward item if you have the software there could be phaseouts that would be in place that could be used the software can help you with the phaseout so the data input fairly straightforward because this is the point in time where the student had already taken out the loan now they're paying back the loan and they're being charged interest on it so that's usually a fairly you know it's usually a fairly straightforward point at this point and you'll get the documentation you might get questions in terms of should I take a student loan that's at the front end before you get the kind of the deduction and how does this play into that basically my decision making process that's kind of a different scenario I wouldn't think that the deducting of the interest would be the deciding factor as to whether you should take on you know student debt or not but it could be I don't even think it would be a relatively you know a big a big factor really in that decision making process but and the laws could change in the future but the ability to take the student loan interest is nice if you have the student loan interest that is being paid but I wouldn't depend on it is my general answer there but we're on the data input side at this point so you'll typically get a 1098 e a 1098 e fairly straightforward form we got line number one student loan interest received and we'll use that to be populating into the system if there's any questions about this form you could find it on the irs website and look at the instructions for box one and two on it here to get a little bit more detail and dive into it a bit more we're going to go back on to the form I'm going to do my good old jump jump to right click and jump to most many softwares have that capacity as does the cert here total total qualified student loan interest let's put our trusty thousand dollars there and when I go back on over I'm going to say nothing's there what happened what happened and that of course is because there's a phase out on the income phase out so we're over I believe it's at for single filers 85,000 and you can see over here we're at the 100,000 so we didn't get a benefit let's lower the income a bit and see what happens if I go back on over and I say well what if I was at like what if I was at like 80,000 80,000 that's still pretty good and then that's you know especially if the world depends there's the 80,000 we're going to go back on over there it is and now you see you get part of the student loan interest is being deducted here from schedule one we've got page number two the three three three you can go into the worksheet for more detail but in general when you're talking to someone about the student loan interest and when you're doing the data input the idea would be yeah you get to deduct the student loan interest but there's going to be a phase out limitation in terms of the capacity to be able to take the deduction and that's the general concept that you want to have in mind and and then possibly have basically the phase out limitations in mind that you can explain to someone and then the the actual phase out calculation depend on the software oftentimes for that calculation so for example if I bring it down if I say well what if it was at like 75,000 75,000 bring it on bring it on over now we're at the 667 let's bring it back and say let's set the 70,000 70,000 forms are now at the the 1,000 getting the full amount at that point in time and you could check out the calculation with the worksheet here which I won't go into in detail if we were married finally joining out that 1,000 of course feeds over to page one of the 1040 and so here we have the 70,000 minus the 1,000 gets us the 69,000 standard deduction still at the 12,550 getting us to the taxable income 56,450 and marrying that on our side over here we would say okay incomes up top we're going to take the adjustments to income adjustments to income actually I got to change the income now is that 70,000 I said it was 70,000 adjustments to income so adjustments to income I got my student loan interest I don't have I don't have that one yet so I'm going to add student loan interest interest there it is one thousand dollars one thou and we're going to then do our blue and border it blueed it and bordered it there it is blueed and bordered and then we're going to go to the first page they're not 170 just 70 where's the 100 coming from schedule C no schedule C no schedule C so there's the 70 minus to 1,000 gets us to the 69,000 for the adjusted gross income the 12,550 standard deduction taxable income the 56,450 is that what we had over here 56,450 it is indeed indeed 8173 on the tax so that that could plug that in 8173 and the tax just to kind of rethink it through so now let's go back on over and say okay well what what are the phase outs we can kind of take a look at those phase outs if they were married like if there were two people Adam's going to marry Eve they're going to they got married so we're going to say this is going from single to married filing joint madam I'm Adam and then they got married and then we're going to go back on over and so now let's bring it back on up I believe you could be around like let's and I won't put two wages two separate W twos I'll just combine them together 170,000 here so I could go back on over and say now at the 170 if I go to page two it's been completely a limited page two of the schedule one I mean it's gone if I go back on over here and I say okay well what if what if they made they made what if they made 120,000 120 what then so now we got the full thousand being taken and and I believe you know we're talking about the joint the joint as if they're like one person because they're married at this point in other words you would think well what does it make a difference if I kind of split it out here and say well one spouse made W2 income and W2 income for the other spouse and I can assign it to the other spouse and let's say let's say the first one made made one let's say 60,000 and 60,000 or you might say what if they made you know 70,000 and 70,000 right and then say does that make a difference on the calculation and you could see it's really just an income cap it's not being applied to each individual you know each individual's earnings so so we got there the the 1000 still being taken what if I put it up to 80,000 and 80,000 that's going to bring it to the 3333333 because because that's the 160,000 and there's no difference if I put it under one 160,000 because these are two people as one for taxes for the most part unless there's some exceptions to that sometimes so you're still at the 333 there and you can note also you could see that kind of because when you put it in the tax return here we didn't indicate if it was for a particular spouse so in any case that's the general idea if we were to pull that on over now we got the 333 if I went to the 1040 we're at married filing joint now married filing joint 160,000 and then we've got the adjusted gross the adjustment at the 333 so I could go back on over here and say okay let's go to my income and say this was 160,000 and then we go to our adjustments adjustments to income and you could do a calculation here or you could you might say hey look it was a thousand with my data input so you can kind of tie it into your actual form which would be on here 1000 and then say what the tax return calculated so you don't have to actually do the calculation but that could be a way to get a little bit more detail pulls that over to page one and then we've got the 160 minus the 333 gives us the AGI adjusted gross income 159,667 the standard deduction should be now for married people because Adam got married to Eve said madam I'm Adam and there's the 25,000 and then 134,867 and so is that what's over here so we've got 134,134,567 134,567 and page two calculates the tax at in this case 21102 21,201,102 21102 21102 so that's just a just to get an idea of the of the of the gist of these kind of of these deductions on the student loan interest