Sample return
Meet Maria: a 2025 return, line by line
Maria is a made-up person. Following her return from top to bottom shows how real numbers flow through the 1040, from paychecks to refund.
Her side business: Schedule C and Schedule SE
Maria reports her photography on Schedule C: $9,000 of income minus $3,000 of expenses (camera gear, editing software, mileage) gives a $6,000 profit. That profit carries to Schedule 1.
Because no employer paid Social Security and Medicare on that money, she owes self-employment tax on Schedule SE: $6,000 × 92.35% × 15.3% = about $848. Half of it, $424, becomes an adjustment that lowers her income.
Income and AGI
| Line | Item | Amount | Why |
|---|---|---|---|
| 1a | W-2 wages | $48,000 | Box 1 of her W-2 |
| 8 | Additional income | $6,000 | Her Schedule C profit, through Schedule 1 |
| 9 | Total income | $54,000 | $48,000 + $6,000 |
| 10 | Adjustments | $424 | Half of her self-employment tax, from Schedule 1 |
| 11a | Adjusted gross income (AGI) | $53,576 | $54,000 − $424 |
Deductions and taxable income
| Line | Item | Amount | Why |
|---|---|---|---|
| 12e | Standard deduction | $23,625 | 2025 amount for head of household. Her itemized costs were much lower, so she doesn't itemize. |
| 13a | Qualified business income deduction | $1,115 | 20% of her business income after the self-employment tax adjustment ($5,576 × 20%), from Form 8995 |
| 13b | Schedule 1-A deductions | $0 | No tips, overtime, new car loan or senior deduction |
| 14 | Total deductions | $24,740 | $23,625 + $1,115 |
| 15 | Taxable income | $28,836 | $53,576 − $24,740 |
Notice that more than $25,000 of Maria's income is never taxed at all.
Tax and credits
| Line | Item | Amount | Why |
|---|---|---|---|
| 16 | Tax | $3,120 | First $17,000 at 10% ($1,700), the next $11,836 at 12% ($1,420) |
| 19 | Child tax credit | $2,200 | Her son is under 17, from Schedule 8812 |
| 22 | Tax after credits | $920 | $3,120 − $2,200 |
| 23 | Other taxes | $848 | Self-employment tax, from Schedule 2 |
| 24 | Total tax | $1,768 | $920 + $848 |
Her top bracket is 12%, but her total federal tax is only about 3.3% of her total income.
Payments and refund
| Line | Item | Amount | Why |
|---|---|---|---|
| 25a | Federal tax withheld | $3,600 | Box 2 of her W-2 |
| 27 | Earned income credit | $0 | With one child, the 2025 credit phases out completely at about $50,434 of income for her filing status, and her income is higher |
| 33 | Total payments | $3,600 | |
| 34–35a | Refund | $1,832 | $3,600 − $1,768 |
What Maria could reflect on for next year
- Her $1,832 refund means she overpaid during the year. She might look at her W-4 if she'd rather have more in each paycheck.
- Her extra withholding happened to cover the self-employment tax. If her photography income grows, she may need estimated payments.
- Better expense records for her business would lower both income tax and self-employment tax.
- She pays for after-school care? The child and dependent care credit could help, and it becomes more generous starting in 2026.
- Contributing to an IRA could lower her AGI and might qualify her for the saver's credit.
These are questions to explore with a tax professional, not instructions. See credits and deductions for more.
Sources
Last updated: November 14, 2026This page was written from the sources below. Official sources are from the IRS or another government body; secondary sources are tax publications used to cross-check new rules. Tax law changes, so always confirm with the official source for the year you're filing.
- OfficialIRS: Tax inflation adjustments (2025 standard deduction amounts)
- OfficialIRS, Instructions for Form 1040, Schedule C, Schedule SE, Form 8995 and Schedule 8812 (2025)
- SecondaryTax Foundation: 2025 tax brackets and EITC parameters
- SecondaryTax Policy Center: Child tax credit for 2025
- SecondaryWiserAdvisor: 2025 EITC phase-out amounts