 Here we are in our example of 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 schedules and forms at the IRS website, irs.gov, starting point as usual. Single filer, Mr. Anderson, no dependence. W2 wages, 100,000, 12,000, 950. The standard deduction gets us down to the 87,050 taxable income, which is mirrored over here on our formula in Excel, 100,000, 12,000, 950, the taxable income, 87,050. We rely on the software to do the calculation of attacks on page number two, which is the 14774 15,000 was withheld. We're going to say getting us down to that 226, which is mirrored over here as well. But our major focus is going to be on the first half of the equation getting down to the taxable income as we focus now on the itemized deductions and more specifically on the medical expense category of the itemized deduction. So if I go back to page one, then we're looking here, we're focusing on the line 12 standard deduction or itemized deduction remembering that no matter what component of the itemized deduction we talk about, we can't really think about it without relation to the standard deduction because the itemized deductions need to clear the standard deductions before we're able to take them. On the left hand side, we have those amounts 12,000, 950 for a single filer and a whopping 25,900 for a married filer. So what's the thing that's going to kick us over that? It's not usually medical expenses unless there was a catastrophe or something. It's usually the purchase of a home or a home ownership because that's the thing that's going to have the mortgage interest. That's the thing that's going to have the property taxes. If we're nowhere near the 25,900 or the 12,950, then it might not be worth our time, worth our while to be adding up all the medical expenses because we may not be able to deduct them anyways. And as we saw in the prior presentation, when we went over all the categories of possible medical expenses, it can get quite confusing to go through and try to add up all the medical expenses. So it's good to know if you think there's no way to get close to that. Plus there's another hurdle. If we go on to the schedule A here, the itemized deductions note that medical expenses are listed first, but that's not the first thing that would come to my mind when I think the schedule A, the first thing that comes to my mind is the purchase of the home or home ownership and the mortgage interest likely related to it. And then the property taxes likely related to it, possibly pushing us over to the point where we can itemize or be close to it. And then think about other things such as the medical and dental, the medical also being limited by that 7.5% of AGI. So I have to clear that floor before it even starts to add to the total itemized deductions and the itemized deductions need to clear the standard deduction before we can take the itemized deductions at all. All right. So let's jump, let's, let's jump to an itemized deduction and just insert some items here. We talked a little bit about the categories before. So I'm not going to go into too much detail on the different categories, but I'll look at some common issues I'll try to touch on. But let's just say we had 10,000 as some kind of medical expense deductible item by pull it back on over. Now we've got the 10,000 included here. But we had a hundred thousand on the, our, our income line. So if I go to my 1040, that's my AGI was at 100,000. So that's a pretty significant amount and 7.5% of it is 7,500. I have to clear the floor 7,500 before any of it 2,500 being the amount over the floor, 10,000 minus the 7,500 even adds to the itemized deductions. Brilliant deduction. You're a credit to your speech, which are here, which need to be higher than the standard deduction, which is that 12,950 or the 25,009 before we get anything. So that's a further complication. Now remember that most of the time it's going to be well, more well off individuals that are taking the itemized deductions because they have more cash flow and likely are purchasing possibly a higher value home or something with a bigger mortgage and property taxes and whatnot. So, so that usually means that they're more likely to itemize, but as the adjusted gross income goes up, it also means there's a bigger floor on the medical expenses before they get any benefit from the medical expenses. So that's the other thing to kind of keep in mind. So normally it would be like, okay, they own a home that kicks them over to itemizing. And then we tack on the added components of say the medical expenses. So for example, a common scenario might be that they, they own a home. And so we're going to say, we're going to expect to see mortgage interest. So let's add the mortgage interest and let's say that that was, let's say that that was 15, let's say that that was 14,000, let's say, and then we had the taxes, property taxes. These are the two things we would expect to see if they owned a home principal residence, let's say 4,000. If I pull that over, now we have the 4,000 and the 14. And so then, then it makes sense to look at the medical expenses to see if that would clear that 7.5% because anything that clears that 75% floor will now add into something that would be beneficial for the itemized deductions, because the total itemized deductions now are clearing the amount on the 1040 for the standard deduction. And therefore we're taking the greater of the itemized or standard deduction.