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Overview

The calculate command computes your complete Form 1040 (or 1040-SR) federal tax return line by line. Use this command to recalculate your return after making changes (adding deductions, updating data, etc.) or to manually calculate a return from existing W-2 data.

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Syntax

/ezfile:calculate
This command has no arguments. It reads existing W-2 data and intake answers from ./returns/ directory.

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Prerequisites

Before running calculate, you must have W-2 data available:
  • Run /ezfile:file-taxes <path-to-w2> first, OR
  • Manually enter W-2 data in the ./returns/ directory
If no data exists, the command returns: 
No W-2 data found. Run `/ezfile:file-taxes <path-to-w2>` first.

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What It Does

  1. Reads return data - Loads W-2 data and intake answers from ./returns/
  2. Reads reference files - Loads 2025 tax brackets, deduction rules, and credit rules
  3. Runs 10-step calculation - Computes every Form 1040 line from income to refund/owed
  4. Verifies invariants - Checks that all line items follow IRS rules
  5. Saves results - Writes complete return to ./returns/return-2025.json
  6. Displays summary - Shows full return summary with all line items

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The 10-Step Calculation Pipeline

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Step 1: Income

Line_1a = Sum of W-2 Box 1 from all W-2s
Line_1z = Line_1a  # Only W-2 income for this profile
Line_9  = Line_1z  # Total income = wages only

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Step 2: Adjustments to Income (Schedule 1)

Only student loan interest applies for EZFile users: 
if student_loan_interest > 0:
    raw = min(student_loan_interest, 2500)
    MAGI = Line_9  # Total income, before adjustments

    if MAGI <= 85000:
        deduction = raw
    elif MAGI >= 100000:
        deduction = 0
    else:
        deduction = raw * (1 - (MAGI - 85000) / 15000)
        deduction = round(deduction, 2)

    Schedule_1_Line_21 = deduction
    Schedule_1_Line_26 = deduction
    Line_10 = deduction
else:
    Line_10 = 0

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Step 3: Adjusted Gross Income

Line_11 = Line_9 - Line_10
This is your AGI - the most important number on your return. It determines eligibility for credits and deduction phaseouts.

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Step 4: Schedule 1-A Deductions (New for 2025)

Calculate each applicable deduction with MAGI phaseout: 
MAGI_for_1A = Line_11  # AGI

# Phaseout function (shared by all Schedule 1-A deductions)
def apply_phaseout(amount, magi):
    if magi <= 75000: return amount
    if magi >= 100000: return 0
    return round(amount * (1 - (magi - 75000) / 25000), 2)

# Tip deduction (Line 1)
tip_deduction = apply_phaseout(tip_income, MAGI_for_1A)

# Overtime deduction (Line 2)
overtime_deduction = apply_phaseout(overtime_pay, MAGI_for_1A)

# Auto loan interest (Line 3) -- max $10,000
auto_loan_deduction = apply_phaseout(min(auto_loan_interest, 10000), MAGI_for_1A)

# Senior deduction (Line 4) -- only if age 65+
if age >= 65:
    senior_1a_deduction = apply_phaseout(4000, MAGI_for_1A)
else:
    senior_1a_deduction = 0

Schedule_1A_Line_5 = tip_deduction + overtime_deduction + auto_loan_deduction + senior_1a_deduction
Line_12c = Schedule_1A_Line_5

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Step 5: Standard Deduction

if age >= 65:
    Line_12a = 17750  # Single, 65+: $15,750 + $2,000 additional
else:
    Line_12a = 15750  # Single, under 65

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Step 6: Total Deductions

Line_12b = 0  # No charitable deduction for this profile
Line_13 = 0   # No QBI deduction for W-2 filers
Line_14 = Line_12a + Line_12b + Line_12c + Line_13

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Step 7: Taxable Income

Line_15 = max(Line_11 - Line_14, 0)

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Step 8: Tax from Brackets

Apply 2025 single filer brackets: 
taxable = Line_15

if taxable <= 11925:
    tax = taxable * 0.10
elif taxable <= 48475:
    tax = 1192.50 + (taxable - 11925) * 0.12
elif taxable <= 103350:
    tax = 5578.50 + (taxable - 48475) * 0.22
elif taxable <= 197300:
    tax = 17651.00 + (taxable - 103350) * 0.24
elif taxable <= 250525:
    tax = 40099.00 + (taxable - 197300) * 0.32
elif taxable <= 626350:
    tax = 57131.00 + (taxable - 250525) * 0.35
else:
    tax = 188769.75 + (taxable - 626350) * 0.37

Line_16 = round(tax, 2)

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Step 9: Credits

Saver’s Credit (Form 8880) - Nonrefundable: 
retirement_contributions = sum of W-2 Box 12 amounts for codes D, E, G, AA, BB
eligible_amount = min(retirement_contributions, 2000)

if eligible_amount > 0:
    if Line_11 <= 23750:
        credit_rate = 0.50
    elif Line_11 <= 25750:
        credit_rate = 0.20
    elif Line_11 <= 39500:
        credit_rate = 0.10
    else:
        credit_rate = 0

    savers_credit = round(eligible_amount * credit_rate, 2)
    savers_credit = min(savers_credit, Line_16)  # Can't exceed tax
else:
    savers_credit = 0

Line_19 = savers_credit
Earned Income Credit - Refundable: 
if Line_11 < 19104 and age >= 25 and age <= 64:
    earned_income = Line_1a

    if earned_income <= 8490:
        eic = round(earned_income * 0.0765, 2)
    elif earned_income <= 10330:
        eic = 649  # Maximum
    else:
        eic = max(round(649 - (earned_income - 10330) * 0.0765, 2), 0)

    # Also check against AGI
    if Line_11 > 10330:
        agi_eic = max(round(649 - (Line_11 - 10330) * 0.0765, 2), 0)
        eic = min(eic, agi_eic)

    Line_27 = eic
else:
    Line_27 = 0
Total Tax: 
Line_22 = max(Line_16 - Line_19, 0)
Line_24 = Line_22  # No additional taxes for this profile

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Step 10: Payments & Result

Line_25a = Sum of W-2 Box 2 from all W-2s
Line_25d = Line_25a
Line_33 = Line_25d + Line_27  # Withholding + refundable credits

if Line_33 > Line_24:
    Line_34 = Line_33 - Line_24  # REFUND
    Line_37 = 0
else:
    Line_34 = 0
    Line_37 = Line_24 - Line_33  # AMOUNT OWED

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Verification

After computing, the command verifies these invariants:
1

Line 11 = Line 9 - Line 10

AGI equals total income minus adjustments
2

Line 15 = max(Line 11 - Line 14, 0)

Taxable income cannot be negative
3

Line 15 >= 0

Taxable income is non-negative
4

Line 16 >= 0

Tax is non-negative
5

Line 22 = max(Line 16 - Line 19, 0)

Tax after credits cannot be negative
6

Line 24 = Line 22

Total tax equals tax after credits (no additional taxes)
7

Line 33 = Line 25d + Line 27

Total payments equals withholding plus refundable credits
8

Line 34 XOR Line 37 > 0

Either refund or amount owed, not both
If any invariant fails, the command displays the error and recomputes.

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Output Format

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Console Display

2025 FEDERAL TAX RETURN SUMMARY
Filing Status: Single
Form: 1040

INCOME
  Line 1a  Wages (W-2 Box 1):        $44,629.35
  Line 9   Total income:             $44,629.35

ADJUSTMENTS TO INCOME
  Line 10  Student loan interest:     -$1,800.00  ← Schedule 1
  Line 11  Adjusted Gross Income:    $42,829.35

DEDUCTIONS
  Line 12a Standard deduction:       -$15,750.00
  Line 12c Schedule 1-A deductions:        $0.00
  Line 14  Total deductions:         -$15,750.00
  Line 15  Taxable income:           $27,079.35

TAX CALCULATION
  10% on first $11,925:               $1,192.50
  12% on next $15,154.35:             $1,818.52
  Line 16  Tax:                        $3,011.02
  Line 19  Saver's Credit:              -$205.35
  Line 22  Tax after credits:          $2,805.67
  Line 24  TOTAL TAX:                  $2,805.67

PAYMENTS
  Line 25a Federal tax withheld:       $4,200.00
  Line 27  Earned Income Credit:          $0.00
  Line 33  TOTAL PAYMENTS:             $4,200.00

─────────────────────────────────────────────────
  Line 34  YOUR REFUND:                $1,394.33
  → Choose direct deposit for fastest refund (~21 days)
─────────────────────────────────────────────────

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Files Created

./returns/return-2025.json - Complete return data: 
{
  "tax_year": 2025,
  "filing_status": "single",
  "form": "1040",
  "line_1a": 44629.35,
  "line_9": 44629.35,
  "line_10": 1800.00,
  "line_11": 42829.35,
  "line_12a": 15750.00,
  "line_12c": 0,
  "line_14": 15750.00,
  "line_15": 27079.35,
  "line_16": 3011.02,
  "line_19": 205.35,
  "line_22": 2805.67,
  "line_24": 2805.67,
  "line_25a": 4200.00,
  "line_27": 0,
  "line_33": 4200.00,
  "line_34": 1394.33,
  "line_37": 0,
  "schedules": {
    "schedule_1": { "line_21": 1800.00, "line_26": 1800.00 },
    "schedule_1a": { "line_1": 0, "line_2": 0, "line_3": 0, "line_4": 0, "line_5": 0 }
  }
}

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Next Steps

After calculating, the command suggests:
  • Run /ezfile:checklist for filing instructions
  • Run /ezfile:explain <topic> for explanations
  • Run /ezfile:review to see the summary again
  • file-taxes - Main command to upload W-2 and calculate
  • add-1098e - Add student loan interest before recalculating
  • review - Display return summary
  • explain - Understand any line or calculation

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