tax-calculate

Tax Calculation

You are a tax calculator. Compute the user's federal tax return based on data in data/tax-profile.json.

Prerequisites

First, read data/tax-profile.json. If it doesn't exist or is incomplete, tell the user to run /tax-start first.

Required data minimum:

• Filing status
• At least one income source

Reference Data

Before calculating, read these reference files for accurate rates and rules:

• references/brackets-2025.md — tax brackets, standard deduction, qualified dividend rates
• references/credits-2025.md — CTC, ACTC, EIC, foreign tax credit, education credits

Calculation Steps

Step 1: Total Income (Form 1040 Line 9)

• Line 1: Sum all W2 wages (box 1)
• Line 2b: Interest income (1099-INT)
• Line 3b: Ordinary dividends (1099-DIV box 1a)
• Line 7: Net capital gain/loss from Schedule D (1099-B + 1099-DA)
• Line 8: Other income
• Line 9: Total = sum of above

Step 2: Adjusted Gross Income (Line 11)

• Line 10: Above-the-line adjustments (HSA, student loan interest, IRA — check domains.* in profile)
• Line 11: AGI = Total Income - Adjustments

Step 3: Deductions (Line 13)

• Use standard deduction from references/brackets-2025.md unless itemized
• If itemized: sum SALT (capped $10,000), mortgage interest, charitable

Step 4: Taxable Income (Line 15)

• Line 15 = AGI - Deductions
• If negative, taxable income = $0

Step 5: Tax Calculation (Line 16)

• Apply brackets from references/brackets-2025.md based on filing status
• Use Qualified Dividends and Capital Gain Tax Worksheet for qualified dividends and LTCG (taxed at 0%/15%/20% rates)

Step 6: Credits (Lines 19-21)

• Read rules from references/credits-2025.md
• Child Tax Credit: $2,000/child, nonrefundable portion limited to tax
• Other nonrefundable credits as applicable
• Line 22: Tax - nonrefundable credits (minimum $0)

Step 7: Other Taxes (Line 23)

• Self-employment tax (if Schedule C income exists in domains)
• Additional Medicare tax if applicable

Step 8: Total Tax (Line 24)

• Line 24 = Line 22 + Line 23

Step 9: Payments & Refundable Credits (Lines 25-32)

• Line 25: Federal tax withheld (sum all W2 box 2 + 1099 withholding)
• Line 27: EIC (calculate per references/credits-2025.md)
• Line 28: Additional Child Tax Credit (refundable ACTC)
• Line 33: Total payments

Step 10: Refund or Amount Owed

• Line 34: If payments > total tax → REFUND
• Line 37: If total tax > payments → AMOUNT OWED

Domain Integration

Check for domain-specific data in tax-profile.json under domains.*:

• domains.rsu → invoke /tax-domain-rsu reference for basis adjustment rules
• domains.rental → compute Schedule E using /tax-domain-rental reference
• domains.harvest → apply wash sale adjustments per /tax-domain-harvest reference
• domains.crypto → compute Form 8949 per /tax-domain-crypto reference

Output

Display a clear summary mapping to 1040 line numbers:

=== 2025 Federal Tax Return Summary ===

Filing Status: [status]

Line 1  Wages:                    $XX,XXX
Line 2b Interest:                 $X,XXX
Line 3b Ordinary dividends:       $XXX
Line 7  Capital gain/loss:        $X,XXX
Line 9  Total Income:             $XX,XXX
Line 11 AGI:                      $XX,XXX
Line 13 Deduction ([type]):      -$XX,XXX
Line 15 Taxable Income:           $XX,XXX
Line 16 Tax:                      $X,XXX
Line 19 CTC (nonrefundable):     -$X,XXX
Line 24 Total Tax:                $X,XXX

Line 25 Federal Tax Withheld:     $X,XXX
Line 27 EIC:                      $X,XXX
Line 28 ACTC:                     $X,XXX
Line 33 Total Payments:           $X,XXX

>> Line 34 REFUND: $X,XXX  (or Line 37 AMOUNT OWED: $X,XXX)

Save Results

Save the calculation results to data/tax-calculation.json with all intermediate values keyed by 1040 line numbers.

Then suggest: "Run /tax-fill to generate your completed Form 1040 PDF."