 Income tax 2021-2022 tax software example unemployment compensation. 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. However, you might want to get access of the form 1040 which you could find at the IRS website at irs.gov irs.gov starting at our starting point single filer Adam Smith living in Beverly Hills 90210 100,000 W2 income. 12,500 standard deduction for the single filer 87 450 at the taxable income mirroring that in our income tax equation. There's the 87 450 relying on the software to calculate the tax page to 15 15 on page to 15 15. That's our starting point. So let's go back on over. Let's say we had some unemployment. Now I'm going to open up a couple more forms that's typically going to be on schedule one. So we can go on the schedule one and I'm going to right click and jump to that on the software to the data input. Many softwares have this capability at least at least if you're talking like like professional software. If you're talking about individual software, it'll usually have like an interview process and then I would have my form my form 1099 from the government and which is usually a 1099 G and it's usually a fairly straightforward process then you can say our unemployment compensation was just let's say it was that 100 1000 again 1000 unemployment compensation back to the forms and then that's going to be populated here on line number seven flows down to the bottom on line 10 and that flows through then to the first page of the form 1040 on line number eight. There's the 1000 adding up here to the 101. If we mirror that in our Excel worksheet I'd say okay there's the income. I'm going to go to adjustments. I'm sorry not adjustments. Additional income schedule one tab and I'm going to put a line in here for unemployment. Unemployment. Did I spell it right? I don't know. I think so. I think it's right. Don't be mad at me if I spelled it wrong. I can't spell. I can't spell okay. So if I sum this up the 1000 if we go back to the first tab then there's the 101 and now we've got the 12,550 still at the standard deduction at the 88,450. The 88,450 is going to be down below page two calculating the tax then at the 15,255. So we have the tax increased 15,255 that we can mirror down here in our tax equation. So the unemployment usually fairly straightforward. Just remember that last year that you had that exemption thing that really kind of throws people off so they might ask you well you know is it taxable or not and last year's the capacity to exempt some of it last year could be a confusion. Also note that you could have confusion related to the identity theft kind of situation where there's a there's a false 1099 in which case you want to go to the government to kind of get that remedied. You could possibly have a withholding too so there might be like a withholding over here and that would be a similar kind of withholding that you would have for if I go back to the forms on page two for a W2 similar to a W2 type of withholding which in our tax formula then would be down here in the payments area similar to the W2 kind of situation in our payments. So I've got estimated payments you might I've got W2 or other withholdings the $10 would go there and then we can go back to the first page we see the $10 so we got the 15,255 minus the 10 gets us to the 15,245 although they'll probably have a penalty calculation if I was to look here of the 274 so I'll just add that here 274 penalty and that brings us to the 15,559 so you can kind of double check in that way but fairly straightforward typically the unemployment in most cases although you often and most of the time by the way I don't see many people doing the withholding on the unemployment because they just take the unemployment and don't set up the withholdings on it but some do and you might see the withholding in there so usually pretty straightforward but you will have to explain it oftentimes to clients that are going to say well why is it taxable it wasn't taxable last year I don't think unemployment should be taxable and so on and so forth.