 Looking at the income tax formula, we're focused on line one income. Remember in the first half of the income tax formula is in essence a funny income statement. Normally an income statement, having income minus expenses resulting in net income. Here we have income minus various deductions resulting in taxable income. When looking at the income line item we typically want it as low as possible for taxes. Therefore looking for things that might be exempt from having to include an income. Also noting that there could be some items included in income which could have favorable tax rates other than being taxed at ordinary income examples being the qualified dividends and possibly long term capital gains. First page of the form 1040, we're looking at line number eight, additional income from schedule one. That's pulling in from the schedule one, additional income and adjustments to income. Part number one is the additional income. Part line number seven is the unemployment compensation. So when we think about unemployment, the question of course will be, do I have to include that in income? Remembering the default position from the government, from the IRS with regards to income is whatever it is, whatever you got, it's income unless there's an exception for it. That's kind of the default type position. So what is unemployment compensation? Well, typically if you're in employment and then you're out of work for a period of time, you might be able to collect then unemployment compensation possibly from the state. First, a word from our sponsor. Yeah, actually we're sponsoring ourselves on this one because apparently the merchandisers they don't want to be seen with us. But that's okay, whatever. Because our merchandise is better than their stupid stuff anyways. Like this CPA thinking cap, for example. CPA thinking, CAP, you see what we did with like with the letters. And this CPA thinking cap is not just for CPAs either. Anyone can and should have at least one possibly multiple CPA thinking caps. Why? Because based on our scientific survey of five people, all of whom directly profit from the sale of these CPA thinking caps, wearing this CPA thinking cap without a doubt, according to the survey, increases accounting productivity tenfold. Yeah, at least. Apparently the hat actually channels like accounting energy from the quantum field ether directly into your head. Allowing you to navigate spreadsheets faster. It's kind of like how in like the matrix when Neo learns kung fu. Or at least that's what the scientific survey's saying. So get one. Because the scientific survey participants could really use some extra cash. If you would like a commercial free experience, consider subscribing to our website at accountinginstruction.com or accountinginstruction.thinkific.com. In that case, the question of course is, well, I've got something. Is that something typically gonna have to be included in income? And usually the answer is yes. Now note what we're talking about here is for the federal income tax purposes. Now they made some changes to that in some prior years. So some people could still be confused about the unemployment compensation because when we went through the whole COVID thing, there were weird changes that were made all over the place. So part of the process that was somewhat static such as typically having to include unemployment got confused for a little while and we're kind of back to the norm at this point in time.