Parlay Economics | Home Economics Journal
The W-2 Is an Input. The 1040 Is the
Model
The forms in the mail carry the inputs. The schedules attach as modules. Manage the inputs and the output can be money.
Document
W-2
1099
1040
Sch A
Sch C
Output
Inputs · The Mail
FORM W-2
WAGE & TAX STMT
Box 1 · Wages
$35,360
Box 2 · Fed tax withheld
$2,210
Box 4 · Soc Sec withheld
$2,192
FORM 1099-NEC
NONEMPLOYEE COMP
Box 1 · Compensation
$4,800
Box 4 · Fed tax withheld
$0
→
The Model
FORM 1040
U.S. INDIVIDUAL RETURN
1a · Wages (W-2)
$35,360
8 · Other income (Sch C)
$3,500
12 · Deduction (Std or Sch A)
−$15,000
24 · Total tax
25 · Already paid in
34 · Refund
▶ output
Modules
SCH A
Itemized deductions
Mortgage · taxes · giving
SCH C
Business income
− expenses = net
→
Output
LINE 34
REFUND
Tax the model computes
Line 24
Paid in + credits
Line 25–32
Deposit to you
$ ▶
One system.
The W-2 and the 1099 arrive as inputs. Form 1040 runs the model. Schedules attach as modules. Select any document to see the job it does.
Illustrative figures | form and line references follow the current Form 1040 layout
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