 Income tax 2022-2023. Other income part number two. Tax software example problems. Let's do some wealth preservation with some tax preparation. Here we are in our example form 1040 using LASERT tax software to populate it. You don't need tax software to follow along but it's a great tool to run scenarios with. You can also find the form 1040 related schedules and forms at the IRS website irs.gov irs.gov starting out with the single filer Mr. Anderson no dependence we got the 100,000 w2 income 12,950 on the standard deduction getting us to the taxable income 87,050 if we mirror that in our worksheet over here 100,000 in our formula standard deduction 12,950 87,050 we have then the tax being calculated by the software on page two there's the tax calculation 15,000 withheld gets us to the 226 here and that's mirrored over here 226 now we're going to focus on the other income so back to page one we're on the income line we've been going into the schedule one schedule one and looking at the other income lines remembering that basically the iris says everything needs to be included in income unless we say otherwise so if there's no other form for it then likely you might need to include it in this other income schedule one line support accounting instruction by clicking the link below giving you a 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to put something somewhere that is equivalent or greater than the 1099 because the iris has the 1099 and so we need to keep that in mind so we went through a few of these in a prior presentation let's look at eight are down here we'll just do a couple more if you got a scholarship or fellowship grants i'm not reported on a form w2 so there's questions with regards to scholarships and fellowships in terms of now you've got money and it's kind of like free money so you think it might be included in income because it seems like a type of of inflow but it would also be one of those things you would expect the iris might exempt so you might have if you spend it in the proper way be able to be exempt from it so enter the amount of scholarship and fellowship grants not reported on w2 however if you were a degree candidate include on line eight are only the amounts you used for expenses other than tuition and course related expenses so you might want to make sure that you're spending the money that your grant money or whatever in a way that's going to be maximizing your benefits and remember there might be a difference between the definition of how you can expend your expenses here which might be a little bit more stringent than possibly if you're looking at some of the education credits like a hope or lifetime credit and trying to qualify there so for example amounts used for room board and travel must be reported online eight are okay so you would think that if obviously the tuition would be the the the solid one the solid bet there so if it's on the w2 then you would expect that it would already be included in the w2 and and therefore excluded from box one of that w2 and so you wouldn't you would think you wouldn't have to do anything because your employer was the one that had to do it there if not then you might have to include it here and so I could say you know 15 000 let's say and bring that over so now that's where it's going to populate and it'll go down here to the 15 000 and then populate to the form 10 40 as we would expect and there's the 15 000 bringing in the taxable income up to 15 150 so I won't go to the excel sheet because I think these are fairly straight straightforward examples so there's one let's just take a look at a couple other ones if I go to the schedule again and let's go to number t so it says pension or annuity from a non-qualified hold on that's not the one I was looking at let's just go to you here wages earned while incarcerated so hopefully you're not incarcerated or anything but if you had a deal with someone who's incarcerated and has wages while incarcerated we might have to report those so just to check those out I'm going to say let's jump to and so obviously those would go here so there's just an example of that line again these wages then would be summed up on down below pull over to page one of the form 10 40 and then if you go through this list of items up top and you think there's something is included in income but there is no location for it then you might go to the other income down here and remember as you do that the question is always going to be is this something that's subject to self-employment tax in which case you would you might have to report it on a schedule c or something otherwise you might have to include it down here as of the other income and some items for that reimbursement of other amounts received for items deducted in an earlier year such as medical expenses real estate taxes general sales tax home mortgage interest and so on so again you have another scenario which is similar to the situation we talked about having income related to the state tax so if you got a state tax deduction you've got the tax refund up top because if you got a deduction for the state tax in the prior year and you got a benefit from it which would only happen if you had a schedule a and you were able to get the benefit from that deduction in the prior year but then they refunded it then we have that scenario which is quite common which is why it's on number one of the schedule one which is that you might have to include that refund in income the rationale being the only other thing you could do would be going to the prior tax return and amend it so you don't want to go prior tax return and amend it you'd rather kind of fix it going forward here you have a similar scenario with these other kind of reimbursements because the concept would be if you got a benefit from it last year a deduction and then they reimbursed something that you got a benefit from from a reduction a deduction then you can either amend the prior your tax return which would be quite tedious or you could try to if they allow you to fix it going forward that would be the easier thing to do those things are easy to do we got re-employment trade adjustment assistance lost on certain corrective distributions dividends on insurance policies recapture of the charitable contribution deduction a couple of those recapture items so those are those are the mains ones down here we got the taxable distributions from the coverdale education savings account or equivalent tuition distributions from these accounts may be taxable if so that would be a situation where you have those benefit kind of investment plans that might be subject to tax and if they were subject to tax then that might be the way you'd have to put them down here on the bottom line so that's the catch all if there's no other location to find it but again the general idea and I'm going to stop saying again I'm sorry for saying again so many times I'll apologize again for saying again so many times again but uh the general rule is that you want to make sure that you're taken into consideration whether or not you are subject to the self-employment tax if you are then you might have to do a schedule C or something like that if you're not then you would expect it possibly to be over here somewhere in the other income if there's no line item for it then you've got the catch all category down here at the other income line z