 Income tax 2021, 2022, filing status, tax software. Get ready to get refunds to the max. Diving in to income tax 2021, 2022. Here we are in our LISERT tax software. It's okay if you don't have access to the LISERT tax software or any tax software. You might wanna look up the PDF files of the actual forms which you could find on the IRS website, irs.gov, irs.gov. In that case, the tax software helping us to do the data input, jumping over to the forms a little bit more quickly. So we're looking at the filing statuses which are up top here. You can see on the form 1040 single married filing jointly, married filing separately, head of household qualified widow, widower. We're gonna start off with the single filing status with our mock client here, Adam Smith, the taxpayer living in Beverly Hills, 90210. We're gonna say that they have 100,000 of income as our baseline. And we're gonna say that then the standard deduction, this is one of the major impacts that you will see with the different filing statuses, that standard deduction that everyone gets will change based on the filing status which you can see on the left-hand side. You kinda wanna memorize these or have an idea of them. They will change from year to year with inflation and so on. 12,550 doubled when married, 25,100. And then in the middle, head of household, 1,800 could also be affected by age as well as if someone's blind or not. So there's the 12,550 pulling in for the standard deduction. You also wanna think about that as the baseline as to whether someone might be able to itemize or not because they would need to be clear in that as we'll talk later. And so that's gonna give us our taxable income 87,450 which we can check in like a worksheet. Say income is gonna go in, let's say this is W-2 income, pulls over to line one. We're not gonna include anything for the adjustments to income at this point, standard deduction being taken, pulling from our information down below, bringing us to the taxable income 87,450. Then we're gonna rely on the tax software to calculate the actual tax. So that's gonna be in accordance with the progressive tax system, 15,15 over here. So I'm gonna put that in here, 15015. Then the average tax is 17.2%. And I won't get into the payments down below, that's where we'll stop it here. So we can see that some of the impacts that would be involved with the standard deduction for the different filing statuses here. If I go to the tax summary, we can then see that we have the average rate 17 and the marginal rate at the 24. That's those tables are going to be based in part on the status as well. And in this case, we're looking at basically the brackets that are assigned to filers that are single as opposed to joint, which we can see are different. 9,950 in the 10% bracket to the 1,900, if I'm looking at the married filing joint. So let's change it to married filing joint. Let's go back up to the 1040. Let's say Adam's gonna get married. So we're gonna go back on over here. Adam met Eve, Adam met Eve. And he said, Madam, I'm Adam. And then they got married. And so then we're gonna go back on over and say now what happens then? We're switching it over to married filing jointly, both living in Beverly Hills, 90210, 100,000 same up top. You might say, well, if they get married, it's possible. They get more income because you got two people that are possibly making income these days. And that's why the standard deduction goes up, but maybe not at the same time. So we're gonna keep it at the baseline of the 100,000. But the standard deduction goes up to the 25, which makes sense because in essence, you don't wanna disincentivize marriage. And if you have two people that are have the same amount of income, if they get married, then you would think that you'd have twice the standard deduction, which is now at the 25, 100, which is pulled in from the table over here. If I was to mirror that on our worksheet, I'm just gonna say, all right, the income's the same. Standard deduction is now at the 25, 100. They would need itemized deductions greater than that in order to benefit from the itemized deductions. And so then the taxable income 74, 900, 74, 900 here. That looks good. So we're gonna go to page two, calculating the tax, 8,593 now. So this is gonna be 8,593. Now this 8,593 is a lot lower for multiple reasons. One is that the standard deduction changed it. So the taxable income is lower. And two, because you've got the tax brackets, which are gonna be different as well for the married filing joint status. So oftentimes married filing joint could be beneficial because oftentimes when people get married, you might not have the two people having the same income stream, especially when they're raising a family and so on. So you would think twice the deduction could be beneficial. But again, you got the, in a case, it could be complex. But if you have other credits that are involved, like an earned income tax credit, for example, child tax credits, sometimes those things can make it a disincentive still to get married oftentimes in the lower income level of things because of those refundable things. But in any case, we'll talk possibly more about that later. So that's gonna be the married filing joint. Now, of course, you could then say once married, you could say maybe I qualify for married filing separate. Oftentimes you don't get as much of a benefit for married filing separate, but you could check that out. And sometimes it's under some circumstances it could be more beneficial. And some people just like to file married filing separate for just to manage the two things separately. But again, oftentimes it's better to file married filing joint just from a total tax return component. So also be careful if you're in like, you wanna know what, if you're in a community property state or not to make sure you got those rules set up. But in any case, we've got the married filing separate. So we moved it over to the married filing separate. Now we're gonna keep the same 100,000 just for our baseline. We're back down to the 12,550 for the standard deduction which is pulled over from our table over here which we can mirror in our formula bringing this down again to the 12,550. Now remember, even though this part is the same filing, filing, married filing separate is not the same thing as filing a single and you could have significant differences in terms of do you have access to refundable credits like the child tax credit, earned income tax credit and so on and so forth. That gets us to the 87,450 here. So the 87,450 if I go back on over is here and then we can calculate the tax. The tax now at the 15,15 back to the 15,15 here. So we're gonna put that in 15,015. So 15015. Okay, so it's back to basically the single and the tables are being changed again here to the married filing separate. So you might look at this and say, well look they just took us back as if we're single but remember it's not exactly the same thing as single when you file married filing separately. So just be aware of that. We're just looking at the standard deductions here, however. Then let's say they go back to single, possibly they separate, get divorced or we're never married or something like that. Then we're gonna go back to single but maybe there's a dependent. So the dependent would then qualify for the head of household. So we go back on over and say, okay, well what if we're back to single here? We're gonna say, what if we're single but now we got a dependent. We'll go to head of household which would mean that we would need to add a dependent. So now we've added a dependent and we're at head of household now. So we've got living in Beverly Hills 902 1 on Sam Smith is the dependent. So now they're single with a dependent therefore head of household is what we could go up moving up from just the single status. And so now we're at the 100,000 again but now we're pulling in the standard deduction at the 18,800 instead of the 12,550 which again, we can verify over here. I can say, okay, what if I said this is gonna be equal to the head of household now bringing it on over to the head of household, 18,8. So there we have that. Now I can verify down here that the taxable income is the 81,200. So okay, does that match out 81,200? If I go to page two then I can look at the actual tax that's being calculated based on different tables now based on different tables for the head of household tables. So I have them there, they are head of household brackets even though they're gonna get them from the tax table charts but those are the tiers for the progressive tax system 12,166. So now I'm at 12,166. And so that's a 15 average percent tax bracket, right? 15 average, if I go back to my tax summary worksheet, 15 is the effective or average marginal rate, highest rate at the 22%. So there we have that. Let's bring it back to married now and then think about a situation where you have people that are older than this age limit 65 I believe in or blind which could have an impact as well. So I'm gonna go back on over to the first one and let's go, let's say dependent. Let's take the dependent off. We're gonna go back to married filing joint. So there we have it. So now we're at the 100,000, the 25 one on the standard deduction based on this over here. So we're gonna say, all right, 25 one, 25 one that brings us back to the income of this net or this taxable income, 74, nine, 74, nine looks good and the tax then is at the 8593. So I'll put that here, 8593. And that's the average rate now of the 1150. So if I go back on over and Sarah tax summary we've got the 1150 average 12 at the marginal. So now let's say that one of them is older than the 65. So note when you do that then it might jump over to a 1040 SR at that point. Or I think it's so easier to look at the form 1040 SR on page four, they've got these adjustments for the calculations in essence of the standard deduction. So now you've got married filing jointly and you've got the one item here that gives us the 26,450. So if I go back up to page one then on the standard deduction now it's on page two on this form we've got the 26,450 or in other words if you were to see that on the standard 1040 layout we've got the 100,000. Now it's at the 26,450 because it's not the 25,100 but it's been increased due to that one item that has been involved. So now if I go back on over here and I was to calculate that here it's okay this is the 25,1 plus we've got the married filing joint one of them involved, 1,350. And so that's gonna get us to the 26,450. The 26,450 taxable income, 73,550 and then the actual tax on page two now at the 8,431. So now we're at 8,431. So we have that. We could have two of them that are over that the age limit. So if I go back on over with the married because you can see it gets fairly complex. You can say, okay, what if I had two of them over the limit? So now again you can take a look it's gonna take you to the form 10,40 SR page four. You can look at married filing jointly. Now you're at two of these conditions of met 27,800. If I jump back to the 10,40 then I'm gonna say, okay, so there's the 27,800 in my normal kind of layout which is different than anything in the standard deductions because you got the two people that qualify for that added amount. I can do that in my worksheet here. I can say, okay, now I'm gonna say this is going to be equal to this plus two of these conditions are met this times two. That's how it gets to the 27,800. 27,800 gives us the taxable income 72,200. So now we've got the taxable income 72,200. Page two tax calculated at 8269. 8269, so 8269. So there we have that. And then we can also say, well, what if the other condition is met would be someone, one of them is blind or both of them, right? We could go into here and say blind. Now if I go back to the form forms and say, okay, let's go to the 10,40 SR, page four. We're looking at married filing jointly. Three of these conditions are met bringing it to the 29,150 standard deduction. Easier to see on the 10,40. Go into the 10,40. We've got the 29,150. If I was to recalculate that on the tax return I'd say, okay, this is gonna be equal to this 25,100 plus this times three of those items are met. 29,150 taxable income 70,550. So if I go back on over 70,550 taxable income calculated the tax in the software, 8,107. So now we're at the tax of 8107. So you can see how those conditions are going to be, have an impact. And then of course you could file married. You could file then after two years after the death the qualified widow, widower status. So if we did that lastly, and that would mean there was a death not in 2021 but possibly prior to that you'd also need to depend generally for that to be met. So then qualified widow, widower. And so then you generally would have a dependent let's, we got the 100,000 and now you're at the 25,100 even though you're not married but you're basically picking up that married rate here. So we'd be back over here. I took away the age condition and the blind condition. So we're back to the standard standards. That's the 74,900. So if I go back on over and say, okay, 74,900 here, page two tax calculated 85,93. 85,93. So there we have that. So those are gonna be some of the standard kind of conditions. I went through that fairly quickly but just to give an idea of these different conditions and some of the major impacts that will be on the tax return, including the tables and the standard. There's also a bunch of other factors that could be influenced, including phase outs of deductions, credits, we'll talk more about those kinds of things in the future.