Alimony & IRA Deduction Example 4107 Income Tax 2025 26

Alimony & IRA Deduction Example Income Tax 2025 26 Playlist:    • Income Tax 2025 26   Federal Income Tax Fundamentals: Why Learn Taxes and How to Think Like a Tax Professional This example walks through Form 1040 adjustments to income in tax software, focusing on alimony rules, IRA deductions, and how they affect adjusted gross income and taxable income calculations. 0:00 Introduction – Income tax software example and overview of adjustments to income 0:07 Data input setup – alimony and IRA deduction scenario begins 0:14 Tax mindset – “death and taxes” discussion and humor intro 0:21 Form 1040 overview – Lacerte tax software and example taxpayer setup 0:32 Starting data – John Smith, income, filing status, and W-2 details 0:50 Adjusted Gross Income (AGI) – calculation from wages and adjustments 1:09 Standard deduction – single filer deduction applied 1:17 Taxable income – calculation of taxable base after deductions 1:27 Tax computation – progressive tax system explanation 1:37 Excel breakdown – formula view of income and tax calculation 1:57 Schedule 1 introduction – adjustments to income location explained 2:09 Schedule 1 structure – additional income vs adjustments 2:16 Focus topic – alimony introduction 2:24 Alimony explanation – divorce scenario and payment context 3:04 Symmetry concept – matching alimony reporting between spouses 3:43 IRS reporting logic – why income and deductions must match 4:19 Tax law change – post-2018 alimony deduction rules 4:56 Practical tax filing – handling old vs new alimony agreements 5:29 Software input – entering alimony recipient details 6:09 IRS enforcement – matching Social Security numbers and reporting 6:47 Prior-year comparison – continuing vs new divorce treatment 7:29 Example entry – $20,000 alimony deduction setup 8:12 Tax result update – recalculated AGI and taxable income 9:00 Tax recalculation – updated tax liability example 9:36 Summary of alimony section – symmetry and rule takeaway 10:05 Transition – moving on from alimony topic 11:43 IRA deduction introduction – beginning new section 12:09 Purpose of IRA – tax incentive for retirement savings 12:33 Critique of IRA system – behavioral and policy discussion 13:48 IRS preference – employer-based retirement systems 14:56 W-2 reporting – retirement plan indicators explained 16:02 401(k) explanation – employer retirement plan structure 17:21 Payroll impact – how contributions affect wages 18:12 Software advantage – reduced need for manual adjustments 19:00 IRA calculation entry – maximizing contribution input 20:06 Timing rules – filing deadline and IRA contribution window 21:06 Retirement planning complexity – income and eligibility rules 22:23 Cash flow requirement – ability to fund IRA contributions 23:29 Investment structure – mutual funds inside retirement accounts 24:06 Tax benefit summary – employer plan vs IRA comparison 25:20 IRA limitations – restrictions and tax advantages tradeoff 26:38 Low-income example – limited tax benefit scenario 27:45 IRA contribution example – small tax savings illustration 29:10 Roth IRA discussion – alternative retirement strategy 30:27 Roth vs traditional IRA – tax timing comparison 31:36 Retirement planning strategy – combining taxable and non-taxable funds 32:52 Retirement withdrawal strategy – managing taxable income in retirement 33:21 Closing thoughts – simplifying tax incentives and system critique