I know some of the people on this site are from outside the USA, and I didn't know if people would be interested in seeing all the factors that are used to calculate federal income tax.
As a packrat, I have all my tax forms back to 1995. This morning, I did my 2019 taxes.
Because I'm older than dirt, I've always done my taxes in paper-and-mail form, except for electronic filing in 2010.
I filed the
1040EZ form in 1995, the
1040A form from 1996 to 1998 and 2000 to 2010, and the
1040 form in 1999 and from 2011 to 2019.
In 1999, I had to file a
1040X form for amending my original form. I had a job in 1998 that ended at the end of December, but I got my last paycheck in January 1999. Because of a cross-country move, I received the W-2 for that job on March 24, 2000.
ITEMS ON THE FORM:
Top of the form:
- In earlier years, I would receive the tax form in the mail, with a pre-printed address sticker, so I put the sticker on my form for all but four years between 1995 and 2009. I've written in my address ever since.
- I donated to the Presidential Election Campaign Fund from 1996 to 1999, back when I felt patriotic about my country.
Calculations:
1. Wages from W-2 form(s): all years
2. Interest income: all years. Mostly, this comes from interest from checking accounts, savings accounts, and certificates of deposit. (Each institution issues a 1099-INT form.) In 2017, it also included money from cashing in EE U.S. Savings bonds for purposes other than educational expenses. In some years, I had to file an extra Schedule itemizing the various accounts, but there's a lot of randomness about which years it was required.
3. State income tax refund: 2012-2017. In the years when I itemized deductions, I got deductions for the state taxes
withheld, which means I had to claim the
refund as income the following year.
4. Pension fund dispersals: 1999. In four years, I received dispersals from 401k's, and I fully rolled them over into IRAs or new 401k's for 3 of those years. In 1999, I received an employer matching amount after the dispersal, so I just cashed it in, rather than roll it over.
5. Unemployment compensation: 2003-2004
6. Jury duty ($11): 2012
7.
Total income: sum of lines 1 thru 6
8. Student loan interest deduction: 1998-2005, except 2001. I have no idea why I didn't claim the deduction in 2001.
9.
Adjusted gross income: line 7 minus line 8.
10. Standard deduction: 1995-2010, 2018-2019. A standard amount for every filer.
11. Itemized deduction: 2011-2017. I had to fill out Schedule A to get my itemized deduction amount. (See description of Schedule A below.) I started itemizing my deductions in 2011 when I bought my house. I discontinued it in 2018 when the amount of the standard deduction was significantly raised.
12. Exemptions deductions: 1996-2017. This was based on total number of people, including dependents. I think this went away in recent tax law changes.
13.
Taxable income: line 9, minus lines 10 thru 12.
14.
Tax: taken from a series of tables and is based on taxable income and filing status (i.e., single, married, head of household, etc.)
15. Tax on pension fund distribution: 1999. Like I said, I cashed in a $430 dispersal, which cost me a 10% penalty.
16.
Total tax: line 14, plus line 15.
17. Federal tax withheld: all years. This is reported on the W-2 form. I don't think I've ever had taxes withheld by anyone other than an employer.
18. "Making work pay and government retiree credits" ($400): 2009-2010. I literally don't remember this.
19. Earned Income Credit: 1995. I turned 25 that year, but I only made a few thousand dollars, so I qualified for the credit.
20. "Credit for federal telephone excise tax paid" ($30): 2006. I have no memory of this one, either.
21.
Total payments: sum of lines 17 thru 20.
22. Overpayment and refund: 1995, 1997-2016. Total payments minus total tax.
23. Money owed: 1996, 2017-2019. Total tax minus total payments.
Bottom of the form:
- Signature and date: all years except 2010 (the electronic year)
- Occupation: all years
- Phone number: 1999-2017, 2019
- E-mail: 2019
ATTACHMENTS:
1. Medical and dental expenses: none. I did the math every year, but my expenses were never high enough.
2. State income tax withheld, from W-2 form(s).
3. Real estate taxes, which had been part of my mortgage payment.
4. Personal property taxes on my car.
5. Home mortgage interest, which had been part of my mortgage payment.
6. Gifts to charity, when applicable.
- Schedule 8889 (Health Savings Accounts): 2012-2017
STATE TAXES:
I won't go into every year. 2000 was the most complicated year, when I filed
Virginia form 760PY for part-year residents,
Kansas form K-40 for non-residents,
Missouri form MO-1040 for residents, and
Kansas City city earnings taxes. For all 3 states, it seems like I calculated my full-year tax for each state and then took a percentage: 64% for VA, 35% for KS, and 1% for MO. (Despite filing as a Missouri resident, their claim on me was only for non-wage income while I lived in that state; I was employed in Kansas.)
