I just want to review quickly the tax formula and then we will move forward from that point.

We looked at how do we come up with the tax that we owe, how do we get a refund, how does

the formula work in determining our taxes? And we said, okay, we start out with our gross

income, meaning we put everything in there, and we're going to next session talk about

what's included in that gross income, less any adjustments. There are certain adjustments

we can take to income, and that gets us to our adjusted gross income, our AGI. And then

we can take either the standard deduction, we're going to look at today what that is,

versus itemized deduction. And so we look at the both of them and then we're going to

take the greater of the two, and then we're going to subtract from that exemptions. So

we have our adjusted gross income minus either the standard deduction or itemized deduction,

minus the exemptions, that's who we claim on our tax return along with ourselves, and

that gets us to our taxable income. We're going to briefly look at the tax rate schedules

and tax tables today, because that's what we use to determine our tax.

And then from our tax, we often get tax credits which reduce our tax or we may have an additional

tax that may be added to our tax, and that comes down to our tax due. It comes down to

our tax due, and then that's what we actually owe. And then throughout the year, as I spoke

before, we have withholding in order to take care of that tax due, and then we also can

make quarterly estimated payments. And if the tax due is more than our withholding or

our quarterly estimated payments, then we owe. If the tax due is less than what we paid

in, meaning we paid in more than what was due, then we would get a refund. So that's

basically how it works, and that picks us up on Page 1-6 of where we look at our standard

deduction. So I want to talk to you briefly about what is the standard deduction. The

standard deduction is the deduction that the IRS or the government gives -- just gives

us. So if I don't have any itemized deductions, meaning maybe I don't have a home where I'm

paying mortgage and I can deduct mortgage, maybe I don't have charitable contributions

and medical and all those things that make up our itemized deduction, but the IRS says,

okay, you may not have those things, but we're just going to give you a basic standard deduction

of which you can use to help reduce your adjusted gross income. So our standard deduction is

based on your filing status, which we're going to talk about today, but I want to go ahead

and cover these amounts. The standard deduction, if you are single,

you get a $5,450 standard deduction. If you are married filing jointly, you get a $10,900

standard deduction. If you are married filing separately, then you would get a $5,450 standard

deduction. If you were filing head of household, which we'll talk about that, you get an $8,000

standard deduction. And then if you are a widow, you would get a $10,900 standard deduction.

So it's based on how you file your tax return. And so also they offer you some additional

ones. If you are blind or 65 plus, meaning 65 or older, you get an additional amount.

If you are considered unmarried, then you would get an additional amount of 1,350 for

each. So if I'm blind and 65 or older, I would end up getting $2,750 -- 2,700, I'm sorry,

dollars in addition to my standard deduction up here. And then if I'm married, I would

get an additional $1,050 for being blind or 65 and older. So you get an additional amount.

Also, so what happens is that these are the standard deduction options. So I go ahead

and compute what my itemized deductions would be. So if I'm single and I have itemized deductions

of 3,000, then I'm going to want to take the standard deduction. If I'm single and I have

itemized deductions of 10,000, then I'm going to want to take the itemized deduction. So

you take the higher of the two. And then also your exemption amount, I'm going to go ahead

and mention that. You get a $3,500 exemption amount for each dependent and for personal

exemptions, which we will talk about that in detail.

So that gets us to Page 1-7 in your text where they talk about, well, you know, people often

want to know I didn't really make that much money, do I have to file a tax return, am

I required to file? And they do have some rules in which help you determine if you're

going to be required to file a tax return. So I want to go to the IRS site and kind of

get you acquainted with the Internal Revenue site. And it is IRS.gov is the site. And you

can find out all type of information. You can type in just a question you have in the

search bar and you can come up with, you know, a list of articles and things to look at.

You can also get tax forms. Let's say that you want to do your taxes and you don't have

software, you didn't get forms in the mail, you go here and do it. So let's go to determine

who must file. So if you type that in, you'll come up with

a list of articles. Do you need to file a tax return? A list of articles and a list

of information, you know, is it an exempt organization. So you can go through those,

but I want to introduce you to a publication that the IRS produces that I really like and

that in my classes that I teach on campus that I go to the IRS and I pick up a publication

17 for all of my students. They're free. There's no charge. Or as I'm doing now, you can access

it on the Internet and it's a PDF file. Now, I wouldn't try to print it off because it's

300 pages, so you don't want to do that. But you can go and find the necessary information

you want. Here's the table of contents. And I am going to cover or look at the chart that

has to do with who must file. And it is going to be on Page 5. They -- they give you a summary

of the new items this year regarding to taxes. So it covers a lot of information. And so

I really like this publication, so I suggest strongly that you use it.

I'm going to go ahead and blow this chart up so we can see it and use it here. Now,

they have a chart in the book, but they have it asterisked as to at the time of the publishing

that this particular chart wasn't available. But I believe it's the same chart, they just

probably hadn't had a chance to verify it yet. But let's look. They say it's based,

once again, off your filing status. So if I'm single and I am under 65 and I had gross

income of at least $8,950, then I need to file a tax return. If it was less than that,

I do not. If I am single and I'm 65 or older and I had income of at least $10,300, then

I would need to file a tax return. So you can use this chart, once again, based

on filing status, which we'll cover here shortly, married filing jointly, married filing separately,

head of household and qualifying widower with a child and they always of course have some

items at the bottom for you to consider. But that helps you be able to tell do I need to

file a tax return? Do I need to file a tax return or not?

And then if you look on Page 1-8 of your book, there's another chart which is also in the

-- on the publication website. Here is what if I'm at -- claimed as a dependent on someone

else's tax return? Do I still need to -- you know, I'm a teenager or a young child that

works, my parents claim me; do I have to file a return? And once again, you can look here

and go through the steps and determine by answering the questions on this chart whether

I need to file a return. And it doesn't mean that you can't, it's just that you're not

required to, because a lot of people who don't meet those income limitations aren't required

to file a return, but they want to file a return in order to get their refund back,

because probably the way it works is that, and this is not always the case, if you are

under those income guidelines, you're probably not going to owe any tax. So that's why they

say you're not required to file a tax return. So if they withheld taxes from your paycheck,

you're going to want to file that return in order to get your amount withheld back, in

order to get a refund, so you want to make sure you do that.

And then, also, on Page 1-8, which we won't go to, they have a Chart C that is for other

situations in which you must file. So definitely go to IRS.gov, use this website,

type in publication 17. It is a excellent website in which to search things. If you

have a question that you can't find right away in the book, go to their Table of Contents

and find the information that you need. So it's an excellent website, okay?

Next we want to look at filing status, like what is my filing status. I've spoke of single.

I've spoke of married filing jointly. I've spoke of single. And so the question is, is

how can I file? Can I file single if I'm still married but maybe I'm separated from my husband?

Can I file married filing separately if, you know, we are married but we just don't want

to file a joint return? So I want to go into detail, and in your packets that you got in

the mail from me, you should have received these notes that we're going to be writing

on today. I sent out the note along with the PowerPoint, if I'm using PowerPoints. So just

make sure that you use those handouts and follow along and take the notes.

Starting on Page 1-9, starting on Page 1-9, we look at -- I want to blow that up a little

bit so you guys can see what I'm writing on here. We want to start with single. As I mentioned,

the filing status is how do you file your return, what is my status? Am I married filing

jointly? Am I single? So that's your status. That's the first thing you have to do is determine

your status. The first one we want to look at is for single people. This is when you

are unmarried. And you're unmarried or legally separated

as of December the 31st. So as I said, I want to mention the fact that if I get divorced

or legally separated on December 31st, I'm considered single for the whole year even

though I was actually married for the entire year. But it's your status as of the last

day of the year, it qualifies you to file that for the entire year. Okay?

And so basically if you're unmarried or legally separated as of 12/31 you can file single,

or if you don't qualify for any other status, so if you do not qualify for any other filing

status. So that's the other reason. As we go through the other ones, you may say, no,

that doesn't fit me, that doesn't fit me, that doesn't fit me. So given those, then

I'm going to have to file single. So if you can't fit in any of the other filing statuses,

then you will be considered single. You will be considered single.

The next one we want to look at is married filing jointly, and that's if you are married

on or by 12/31. Once again, if I get married on December 31st, I'm considered married for

the same -- for the entire year. Same sex couples do not -- cannot file jointly. So

it doesn't apply to same sex couples. So you can't file for the IRS purposes, you cannot.

Okay. And then, also, if your suppose dies during the year, you can still file a joint

return. So if your spouse dies, you just indicate on there the date of the death and then you

can still in that year of death file a joint return. So that is married filing jointly.

So married as of the end of the year, same sex couples don't apply, and then if the spouse

dies during the year, you can still file married filing jointly.

Okay. If you're married, you can have an option of filing married filing separately, if you

choose to. And that's when each spouse files a separate return. So instead of combining

our income, we're going to file a separate return. And we're going to file married filing

separately, which tends to be the highest income tax, the highest tax bracket, it tends

to be the highest tax bracket. One thing about that, that when you file a married filing

separate return, either you both have to take the standard deduction or you both have to

itemize. So despite, you know, what's more advantageous for the other, you both have

to do the exact same thing. So you either both have to take the standard deduction or

you both itemize. One can't itemize and one can't take the standard deduction, okay.

And then for -- you need to follow state law for those who are in community property states,

which Kansas or Missouri is not a community property state. So if you're in a community

property state, you want to make sure you check out the state law for how to -- how

it works for married filing separately. And what happens is that, depending on your state

and state law, is that even though we're filing a separate return, in a community property

state, just to give you a little history, it means that all our property is considered

joint property. And so, therefore, if I'm filing a separate return, everything that

we do as a couple is joint. So in certain community property states, property that is

joint, then half of it has to go on one spouse's return, half has to go on the other spouse's

return. In community property states, in all community property states, wages, if me and

my husband lives in a community property state, half of his wages go on my return, half of

my wages go on his return. In Missouri and Kansas, which is not a community property

state, if we file a separate return, I'm only