What is S/P in “Tax Deduction S/P”?
From reading the manual, SP means summary punching.  Summary punching is the automatic preparation of one total card to   replace a group of detail cards.
The taxes that are deducted from you paycheck are estimated from the expected annual income you receive from the employer. In the same way, the employer will deduct from that expected annual income the tax deductions you would get for the number of dependents you specify. Hence your net income will be lower, your annual tax obligation also, which can than be calculated down to the period of your paycheck. You’re conflating deductions with expenses, which are different. Revenue is all money collected. Income is revenue minus the sum of expenses and deductions and exemptions. You’re also treating direct subsidies as the only form of subsidisation, which would make the word “direct” superfluous, while ignoring indirect subsidies, which include deductions. And, no, not every business takes deductions and certainly not while simultaneously complaining (or standing idly by while others complain) about subsidies. Here's the best explanation I found relating to why your T4 box 39 might not have an amount filled in, even when box 38 has one: Department of Finance – Explanatory Notes Relating to the Income Tax Act [...]. It's a long document, but here's the part I believe relevant, with my emphasis: Employee Stock Options ITA 110(1)   [...]   Paragraph 110(1)(d) is amended to include a requirement that the   employee [...] exercise the employee’s rights under the stock   option agreement and acquire the securities underlying the agreement   in order for the deduction in computing taxable income to be   available [...] ensures that   only one deduction is available in respect of an employment benefit. In other words, if employee stock option rights are surrendered to an   employer for cash or an in-kind payment, then (subject to new   subsections 110(1.1) and (1.2)) the employer may deduct the payment   but the employee cannot claim the stock option deduction. Conversely,   where an employer issues securities pursuant to an employee’s exercise   of stock options, the employer can not deduct an amount in respect of   the issuance, but the employee may be eligible to claim a deduction   under paragraph 110(1)(d). Did you receive real shares based on your participation in the ESPP, or did you get a cash payment for the net value of shares you would have been issued under the plan? From what I can tell, if you opted for a cash payment (or if your plan only allows for such), then the part I emphasized comes into play. Essentially, if conditions were such that your employer could claim a deduction on their corporate income tax return for the compensation paid to you as part of the plan, then you are not also able to claim a similar deduction on your personal income tax return. The money received in that manner is effectively taxed in your hands the same as any bonus employment income would be; i.e. it isn't afforded tax treatment equivalent to capital gains income. Your employer and/or ESPP administrator are best able to confirm the conditions which led to no amount in your box 39, but at least based on above you can see there are legitimate cases where box 38 would have an amount while box 39 doesn't. "P/E is price to earnings, or the price of the company divided by annual earnings. Earnings, as reported, are reported on accrual basis. Accrual basis accounting is...without going too deep, like taking a timeline, chopping it up and throwing different bits and pieces of every year into different piles.  Costs from 2008 might show up in 2011, or the company might take costs in 2011 that aren't necessarily costs until 2012.  Examples would include one-time charges for specific investments, like new shipping centers, servers for their hosting services, etc.    Free cash flow is the amount of cash Amazon is generating from its operations. Free cash flow is almost always different from earnings because it's the amount of Earnings + adjustments for non-cash activities - capital expenditures (long-term investments.)  Earnings is one thing.  Cash generation is a completely different animal.  There are plenty of companies that ""earn"" billions, but only have a few hundred million in cash to show for it because their earnings have to be reinvested into new stuff to grow/maintain the business.  To have a free cash flow yield of 2.5% is to have a company valued at $40 for each $1 of free cash flow that the company generates each year.  $1/$40 = 2.5%.  SGA = Selling, General, &amp; Administrative expenses.  These are the costs of running the company - paying salaries, advertising, etc.  This cost is second only to COGS, which is Cost of Goods Sold.    Currently, Amazon pays $.774 for every $1 product it sells.  Its operations add another ~$.20 to that total.  After taxes, Amazon keeps about 2 cents of every dollar's worth of product it sells.  This 2 cents is Amazon's net margin of 2%.  Net margin is (net income)/(sales).  If Amazon earned $3 for every $100 in sales it would have a net margin of 3%.     Let me know if this makes no sense.  If there's anything in particular that is especially confusing, definitely reply and I'll better clarify on specific items.  Fire away with any questions, also.  I love to discuss finance and accounting." I see several interesting statement in your question.  A. my only income is from my Employer B. I also receive employer stock (ESPP, RSU, NSO). However, employer withholds taxes for these stock transactions through my broker (I see them broken down on my W2).  C. I have been subject to Alternative Minimum Tax. A implies a simple tax return. B and C tell the opposite story. In fact if B is not done correctly The amount withheld due to payroll may be perfect but the under withholding could be due to the ESPP's, RSUs and NSOs.  The AMT can throw everything else out the window.  If a person has a very simple tax situation: Income doesn't change a lot from paycheck to paycheck; they take the standard deduction; the number of exemptions equals the number of people in the family. Then the withholding is very close to perfect.  The role of the exemptions on the W-4 is to compensate for situations that go above the standard deduction. The role of extra withholding is when the situation requires more withholding due to situations that will bring in extra income or if the AMT is involved. Reading that fallacy: it says that the money could have been spent elsewhere rather than here to possibly greater benefit. In this case it's the full tax revenue that the state declined to take (which is he tax break). So I don't really see the point when that revenue will possibly not even exist. First of all, this is a situation when a consultation with a EA working with S-Corporations in California, CA-licensed CPA or tax preparer (California licenses tax preparers as well) is in order. I'm neither of those, and my answer is not a tax advice of any kind. You're looking at schedule CA line 17 (see page 42 in the 540NR booklet). The instructions refer you to form 3885A. You need to read the instructions carefully. California is notorious for not conforming to the Federal tax law. Specifically, to the issue of the interest attributable to investment in S-Corp, I do not know if CA conforms. I couldn't find any sources saying that it doesn't, but then again - I'm not a professional. It may be that there's an obscure provision invalidating this deduction, living in California myself - I wouldn't be surprised. So I suggest hiring a CA-licensed tax preparer to do this tax return for you, at least for the first year. "The $10,400 is in the question, in two pieces.  His employer withheld $8000, and her employer withheld $2400.  Thus they paid together $10,400 in income taxes, which are deductible if you itemize deductions and choose income taxes over sales taxes (you can deduct one or the other).  There's nothing ""standard"" about the amount, though it is standard to take the income tax deduction (almost always higher than sales tax)." From the instructions: If you do not need to make any adjustments to the basis or type of   gain or loss (short-term or long-term) reported to you on Form 1099-B   (or substitute statement) or to your gain or loss for any transactions   for which basis has been reported to the IRS (normally reported on   Form 8949 with box A checked), you do not have to include those   transactions on Form 8949. Instead, you can report summary information   for those transactions directly on Schedule D. For more information,   see Exception 1, later. However, in case of ESPP and RSU, it is likely that you actually do need to make adjustments. Since 2014, brokers are no longer required to track basis for these, so you better check that the calculations are correct. If the numbers are right and you just summarized instead of reporting each on a separate line, its probably not an issue. As long as the gains reported are correct, no-one will waste their time on you. If you missed several thousand dollars because of incorrect calculations, some might think you were intentionally trying to hide something by aggregating and may come after you. I know nothing about this, but found this link which suggests for H&R Block specifically: I kept searching and I found the section. It's at the end in the Credits section under 'other backup withholding'. Hopefully this helps someone else in the future. Those choices aren't mutually exclusive.  Yes, most discussion of the mortgage interest deduction ignores the fact that for a standard itemizer, much, if not all of this deduction can be lost.  For 2011, the std deduction for a single is $5,800. It's not just mortgage interest that's deductible, state income tax, realestate tax, and charitable contributions are among the other deductions. If this house is worth $350K, the property tax is about $5K, and since it's not optional, I'd be inclined to assume that it's the deduction that offsets the std deduction. Most states have an income tax, which tops off the rest. You are welcome to toss this aside as sophistry, but I view it as these other deductions as 'lost' first.  I'm married, and our property tax is more than our standard deduction, so when doing the math, the mortgage is fully deductible, as are our contributions.  In your case, the numbers may play out differently. No state tax? Great, so it's the property tax and deductions you'd add up first and decide on the value the mortgage deduction brings.  Last, I don't have my mortgage for the deduction, I just believe that long term my other investments will exceed, after tax, the cost of that mortgage. Time to look at a tax table.  A retired couple hits the top of the 15% bracket with an income of $96,700. (I include just the standard deduction and exemptions.) The tax on this gross sum is $10,452.50 for an 'average' rate of 10.8%.  This is what 2 answers here seem to miss, and the 3rd touches, but doesn't keep going.  The tax, paid or avoided, upon deposit, is one's marginal rate. But, at retirement, the withdrawals first go through the zero bracket (i.e. the STD deduction and exemptions), then 10%, then 15%.  The Roth benefit is maximized  In the end, to choose between Traditional or Roth, one would have to have far more details regarding the person's financial situation. The right choice is rarely 100% known except in hindsight. In 2012, the standard deduction is $5950 for a single person.  Let's assume you are very charitable, and by coincidence you donate exactly $5950 to charity.  Everything that falls under itemized deductions would then be deductible.  So, if your property tax is $6000, in your example - Other adjustments come into play, including an exemption of $3850, I am just showing the effect of the property tax.  The bottom line is that deductions come off income, not off your tax bill. The saving from a deduction is $$ x your tax bracket. "No, you can't deduct any of that. What they're talking about is a flexible spending plan, otherwise known as ""Use it or lose it"" money.  You choose to put pre-tax dollars into a restricted fund.  This money is not taxed, in fact technically, it's not even income.  You can only spend out of that fund to buy parking, tolls, transit tickets, things like that.    Any money not used for those purposes in a suitable time period evaporates.   Gone, and irrecoverable.  You can't even take the loss as a tax deduction! You have to set this account up with your employer.   You can't just dig up your old transit and parking receipts and stick those on your Schedule A.   Take 3 people.   As you can see, Fran is shooting herself in the foot. This is where these plans can go wrong." IANAL, but it sounds like indemnification language. They are saying they have the option to charge expenses to participants if they would like. It should say explicitly (you mention that it does) who the 'default payer' is. Unexpected expenses could be anything that's not in the normal course of business. I know that doesn't help much, but some examples may be plan document restatements or admin expenses from plan failures/corrections. We have language in some of our PFDs that say in the absence of revenue-sharing a participants' share of expenses may be higher. Yes, 'from participant accounts' means they have the authority to deduct from your 401k account.