1040A Adjusted Gross Income Tips

Video Transcript

I'm going to talk now about Adjusted gross income. These are adjustments that you can subtract from your total income, line 15, to get to an adjusted gross income amount. And these include Educator expenses, IRA deduction, student loan interest deduction, and tuition and fees deduction. Educator expenses, if you are an eligible educator in 2007 you can deduct up to 250 of qualified expenses you paid in 2007. And if both you and your spouse are teachers, you can deduct up to $500. To qualify as an educator, you must be either a kindergarten through grade 12 teacher, instructor, counselor, principal or aide who worked in a school for at least 900 hours during a school year. Qualified expenses include ordinary and necessary expenses in connection with books, supplies, equipment. That includes computer equipment, software and services, and other materials used in the classroom. An ordinary expense is one that is common and accepted in your education field. A necessary expense is on that is helpful and appropriate for your profession as an educator. An expense does not have to be required to be considered necessary. Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education. Another adjustment you may be able to take is your IRA deduction. If you made a contribution to your IRA in 2007 you may be able to take this deduction. But to determine your eligibility, first of all if you are over the age of 70 and a half at the end of 2007 you cannot deduct any of these contributions to your IRA. But one thing that you will need to do is work through this IRA deduction worksheet starting on page 27 and continuing on to page 28. Once you have worked through the IRA deduction worksheet you'll come up with an amount that you can deduct from your adjusted gross income, line 17.

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