 Here we are in our example, Form 1040 populated using LASERT tax software. You don't need tax software to follow along, but it's a great tool to run scenarios with. You can also get access to the Form 1040 related forms and schedules at the IRS website, irs.gov, irs.gov, starting point, single filer, Mr. Anderson, 100,000 W2 income, 12,950 for the standard deductions, getting us down to the 87,050, mirroring that over here on our tax worksheet calculation. And then we're letting the software do the tax calculation on page 2, 14774, 15,000 withheld, getting us to the 226, mirroring that in our worksheet, 14774, 15,000 withheld, 226 were mainly concerned, however, with the top part of the equation looking at the income tax or taxable income calculation. So let's go back to that first page. We're focused down here on the itemized or the standard deductions. Remember, and we only take the itemized deductions if they're greater than the standard deductions. However, we could have an exception to that general rule. There's a general rule, in essence, if we have a qualified disaster type of situation, which we talked about a little bit in a prior presentation, but we'll touch on here. Otherwise, it's usually the case that these other deductions are probably not going to be the thing that pushes people over. The main thing that pushes people over is the home purchase. And that means that you might have a loan related to it, which causes mortgage interest, deductible, and then the property taxes, which are the two big ones. We'd have to clear 12,950 single, 25,900 before we benefit. Let's check it out on the Schedule A to see it in more detail. Schedule A and then the big ones are the taxes and the interest here, but we're focused down here on the cash on the other itemized deductions. So the one big one that could come into play, which will be unique to a particular area or a particular disaster, is the qualified disaster. And if there is one or any kind of federally declared disaster, which may be leveled up to a qualified disaster, and we talked about that more in a prior presentation, so we'll just touch on it here. But you can do more research by looking up the disaster on the IRS website, possibly the FEMA website, looking at the instructions from Form 4684, and then diving into more detail on the specific problem that may have happened in your particular location. Now remember, if it's just a qualified disaster, then it might be up here in the casualty and theft laws. I'm sorry, if it's just a federally declared disaster, it might be up here. And then if it's a qualified disaster, it might be pulled down here into the other itemized deductions where even if you're not clearing the standard deduction, it might still have a benefit. So let's give a quick recap on that. This is coming from Form 4684. So if I scroll down to 4684, 4684, we've got the casualty and theft losses that will typically be populated in a form that's going to be like disbursements like a schedule D for the capital gains. And I'll just put the property again, the date acquired, I'm going to say is negative 010122, or let's not say 22, let's say it was sometime a few years ago, 20 dates sold, the date of the disaster 061522, let's say sales price zero, the cost 10,000. Same example we saw before in the prior presentation. So there we have it. And then I'm going to go to the casualty and theft information and say it was, let's say, a fire. And then we would pick the designation, personal property disaster that happened. And then there's a distinction between the qualified disaster and the non qualified disaster. So there's a difference in the reporting between those two. I won't pick the actual code right now. We'll come back to that in a second. But I'm picking non qualified at this point, fair market value of the casualty, I'm going to say is less than the cost. And I'm going to say we got re compensated for insurance, fair market, fair market value determine safe harbor insurance of 100 or 1000, I'm going to say. So let's just see what that populates in the software. So I pulled back on over here to 4684. And you can see it's basically taken the rule for a loss that's a federally declared disaster, but not qualified, I believe is the way to state it. And so we've got the $100 deduction, but there's also that 10% of the AGI, which basically wipes it out, which means it's not being pulled over here to the schedule a. Now I'm going to adjust that I'm going to bring the income level down, let's say to 50,000, let's bring it down to 50,000. And then if I go back on over, you would think that it would it would pull over now, but it's still not pulling over, we'll pull over, we'll pull over, pull over, because it's going to be limited. So if I scroll down, I could see it pulling over at 9,000, 2,900, but I'm not over the threshold to itemize. So it's not pulling, it's not helping at that point in time. However, if now I say let's pull it back up, I'm going to say let's pull my income back up to 100,000. Now it's not populating here at all, but now I'm going to say it's a qualified disaster, which means it's going to move it from the casualty and theft losses down to where we're focused, other itemized deductions. Let's do that. So now I'm going to go back into my disbursements and I'm going to say that it's now a federally declared qualified disaster. Now note that you would want to pick the actual disaster, make sure that you're doing your research to drill down on how to properly record this for the unique area that you're particularly in, your tax software should have the information in it because it was declared and it's usually, it might have a FEMA code and whatnot that you can then tie in and do more research on for that particular issue, but just to see the general flow, now I'm going to flow it back on over and you can see that we have the form 4684 is now being populated, calculated a little bit differently for the qualified disaster. We don't have that 10% of AGI thing going on. We get to the calculation of that 7,500 pulling into the Schedule A, but now it's down here on the other itemized deductions and even though I wasn't itemizing, it basically took that 7,500 plus the floor of the standard deduction, the 12,950 that normally I have to clear before itemizing and just adds it in there so that I basically get the advantage of taking the net qualified disaster even though I'm not itemizing, so that's huge. I mean that could be a big deal and that pulls on over to the first page, so that's kind of an exception to that general rule that you'd have to clear the itemized. It's itemized. It did clear the itemized deductions, but it did so by adding the 12,950 to the itemized deduction, so you have to kind of be aware of that in the specific area. So if you have a qualified disaster or a federally declared disaster of any kind, you probably want to drill down and look at the specifics on how to calculate that unique situation. It's unique because every situation will have its own code, but the general rules for a qualified disaster and a federally declared disaster will generally apply if that category had been applied to whatever disaster you're dealing with, but you want to drill down on that. Okay, so I'm going to undo that. Let's say let's remove that craziness. I'm going to say let's delete that out of here and that puts us back to where we were before, so now we've got the 100,000 and the 12,950. Now let's imagine the other kind of common one in this area which is that gambling loss situation. Now remember in practice you might have some clients that like to gamble a lot and so you want them to be aware of, you know, collecting their losses so that if they have any winnings or when they have any winnings, because eventually you will have winnings, although you would expect the losses to be greater if you're doing gambling at a horse track or a casino or particularly a casino or something like that.