(3) If your total numbers of exemptions are less than the total of the parties and the children, you will be alerted.
The program is designed to automatically calculate the phase-out of the allowable exemption amount as incomes rise above certain levels. The Taxes Page (Tax Calculations button on the Front Page) will show you the dollar amount of exemptions allowed.
Filing Status Enter the appropriate number to indicate the filing status of the party for his/her tax
Married, filing jointly
Married, filing separately
Head of Household
Allowable Itemized Deductions
This is a little trickier.
The State Income Tax Will Automatically Be an Itemized Deduction: First of all, the program will first calculate the state income tax and insert them into the Itemized Deductions Page before it calculates the federal income tax since South Carolina does not allow you to use the state income tax deduction for your South Carolina tax. You will not be able to alter this particular deduction on the Itemized Deductions Page.
Standard v. Itemized Deductions: Second, the program is designed to use automatically the larger of the Standard Deduction or Itemized Deductions. If the Standard Deduction is larger than the allowable Itemized Deductions, the program will use the Standard Deduction.
To see which one the program used, go to the Taxes Page (Tax Calculations button on the Front Page) and it will show you.
The IRS Limits on Itemized Deductions: The Internal Revenue Code limits the amount of Itemized Deductions a party can have. It limits certain categories of deductions (e.g., medical expenses and employee business expenses) as well as the total amount of deductions. This program will calculate the Itemized Deductions, taking those limitations into account.
If you use the Itemized Deductions Page, the enter the gross amount of deductions for each line and the program will calculate the allowable amounts as well as the total that is allowed.
If you want to itemize the deductions on the Itemized Deductions Page, click the Itemized Deductions Page button or use the menu or press Ctrl-D at the same time.