Which taxes are included in the tax calculation API?

Our tax calculation API provides estimates for:

  • taxes owed specifically on 1099 income, at both the state and federal level.
  • taxes owed on social security income.
  • W2 income, though only in consideration for determining the estimated tax bracket. Currently AboundĀ® does not provide income tax calculations on the W2 income itself.
    For more detail, please see our tax calculations breakdowns.

How is the standard deduction taken into consideration?

Our tax calculations take the most conservative approach and assumes that each individual takes the standard deduction, given their filing status (single, married, head of household, filing separately) passed during tax calculations.

How is the QBI deduction modeled?

Similar to the standard deduction, AboundĀ® calculates the QBI deduction by following the steps described in Form 8995. The QBI deduction calculation:

  • considers all 1099 income in calculation of adjusted gross income
  • incorporates the income phaseout for each filing status to adjust qualified business income
  • ignores REIT and PTP components
  • assumes all individuals are an SSTB (unless they meet the income threshold)

Do you handle mileage deduction?

Mileage records associated with user will be taken into consideration when calculating their mileage deduction.

How is 1099 income handled for different legal entities?

AboundĀ® currently calculates all 1099 income taxes at the personal level, assuming the income is earned as a Sole Prop or LLC passthrough. AboundĀ® does not currently differentiate between types of 1099 or S-Corp disbursements.

My user is married and their partner has a W-2 income, they are filing jointly, what information do I need to provide in order to get a more precise tax calculation?

To estimate tax effectively for married filing jointly, AboundĀ® would need the full joint incomes, including any 1099 or W-2 amounts earned outside of our systems.

If you have additional questions, please contact our support team.