 Looking at the income tax formula, we're focused on the itemized deductions, remembering that the first half of the income tax formula is in essence an income statement where we have income minus the equivalent of the expenses, those being the deductions, equals the equivalent of net income, that being taxable income, except everything's topsy-turvy upside down for taxes. We want taxable income, in other words, to be as low as possible as opposed to net income where we normally want it to be as high as possible. In prior presentations, we talked about what needs to be included in income. We talked about the above-the-line deductions as opposed to the below-the-line deductions we're doing now, otherwise called adjustments to income to get to that subtotal, AGI, important subtotal, because that's the one typically used when we have income phaseouts for certain deductions and credits. Now we're on the below-the-line deductions, the greater of the standard or itemized focusing specifically on the itemized deductions. Looking at the first page of the 1040, those are on line 12, standard or itemized deductions. We only take the itemized deductions typically if they're greater than the standard deduction of the 12,950 for single filers, 25,900 for married filing joint. We could have a weird exception of using the Schedule A if there's a qualified disaster type of situation, so remember if there's a qualified disaster you should be able to look that up on the IRS website and you might have a situation where you still are using the Schedule A but in essence possibly get the benefit even though you would be normally taking the standard deduction, so be aware of that. This is the Schedule A, these are the other itemized deductions. As you can see they're a lot lower or there's a lot less activity than you might remember from like a long time ago where you might have more things that would be included in say other itemized deductions. A science of deduction. So now they're much more limited, the example here being the gambling losses to the extent of the winnings, remember that normally these other deductions are not the area that's going to kick people over to taking the itemized deductions unless it's one of those qualified disasters or something like that that took place. So normally you wouldn't be taking something like gambling losses unless you are already itemizing the thing that kicks people over to being able to itemize typically being owning a home because then you have the mortgage interest and the property taxes and then if you can tack on gambling losses on top of that to the extent of gambling winnings then maybe you can get an added benefit. So remember standard deduction you got to clear the threshold usually unless there's an exception for the qualified disaster 12,950 single 25,900 19,400 head of household here's the other other weird circumstances if over 65 that which isn't a weird circumstance but other standard deductions there and or if blind. So other itemized deductions line 16 increase standard deduction reporting if you have a net qualified disaster so here's that net qualified disaster again loss form 4684 we talked about form 4684 in a prior presentation line 15 and you aren't itemizing your deductions you can claim an increased standard deduction using schedule a by doing the following. So we looked at a software example of this in the past we might just recap it again in a future presentation number one list the amount from form 4684 line 15 on the dotted line next to line 16 as quote net qualified disaster loss in quote at attached form 4684 number two list your standard deduction amount on the dotted line next to line 16 as quote standard deduction claimed with qualified disaster loss and three combined the two amounts online 16 and enter on form 1040 or 1040 SR line 12. So in essence you're going to use schedule a but you're going to you're going to add the standard deduction in so that it will help you to clear the standard deduction. And so when you so when you pull it over to the first page it will be increased by the standard deduction. So we looked at an example of that last time we might look at it again in the software just to get an idea that it's a little funny it's a little weird but it works. Do not enter the sign said do not enter. See just one more point on that. If you have a qualified disaster in an area where you are at or you're doing tax returns at then you clearly want to get more information from the IRS website and FEMA website on that particular disaster and drill down on it is it is it a qualified disaster and so on and then and then be ready for that kind of unique situation for that particular disaster because it'll usually have its own code that you can then populate within the tax software which hopefully should also have the code within there for the FEMA code and the disaster code and so on.