Tax Filing

Tax Filing Skill

Prepare federal and state income tax returns: read source documents, compute taxes, fill official PDF forms.

Year-agnostic — always look up current-year brackets, deductions, and credits. Never reuse prior-year values.

Folder Structure

Organize all work into subfolders of the working directory:

working_dir/
  source/              ← user's source documents (W-2, 1099s, prior return, CSVs)
  work/                ← ALL intermediate files (extracted data, field maps, computations)
    tax_data.txt       ← extracted figures from source docs
    computations.txt   ← all tax math (federal, state, capital gains)
    f1040_fields.json  ← field discovery dumps
    f8949_fields.json
    f1040sd_fields.json
    ca540_fields.json
    expected_*.json    ← verification expected values
  forms/               ← blank downloaded PDF forms
    f1040_blank.pdf
    f8949_blank.pdf
    f1040sd_blank.pdf
    ca540_blank.pdf
  output/              ← final filled PDFs + fill script
    fill_YEAR.py       ← the fill script
    f1040_filled.pdf
    f8949_filled.pdf
    f1040sd_filled.pdf
    ca540_filled.pdf

Create these folders at the start. Keep the working directory clean — no loose files.

Context Budget Rules

These rules prevent context blowouts that cause compaction:

1. NEVER read PDFs with the Read tool. Each page becomes ~250KB of base64 images (a 9-page return = 1.8 MB). Extract text instead:

   python3 -c "
   import pdfplumber
   with pdfplumber.open('source/document.pdf') as pdf:
       for p in pdf.pages: print(p.extract_text())
   "
   

2. NEVER read the same document twice. Save extracted figures to work/tax_data.txt on first read.
3. Run field discovery ONCE per form as a bulk JSON dump to work/. Do NOT use --search repeatedly.
4. Save all computed values to work/computations.txt so they survive compaction.

Workflow

Step 1: Gather Source Documents

Ask the user what documents they have. Read files from source/ (move them there if needed). Use pdfplumber for PDFs, Read tool for CSVs.

Save all extracted figures to work/tax_data.txt immediately — one section per document with every relevant number.

Step 2: Confirm Filing Details — MANDATORY

You MUST ask the user every one of these questions and WAIT for answers before proceeding. Do NOT skip this step even if you think you know the answers from memory or source documents. Tax returns are legal documents.

• Filing status (Single, MFJ, MFS, HOH, QSS)
• Dependents (number, names)
• State of residence
• Standard vs. itemized deduction preference
• Digital asset / cryptocurrency transactions (Yes/No) — stock trades are NOT digital assets
• Health coverage status (for CA)
• Any estimated tax payments made
• Any other credits or adjustments

Do NOT proceed to Step 3 until the user has answered. "Same as last year" counts as confirmation.

Step 3: Look Up Year-Specific Values

Research from IRS.gov and FTB.ca.gov:

• Federal tax brackets, standard deduction, QDCG 0%/15%/20% thresholds
• State tax brackets, standard deduction, personal exemption credit

Save to work/computations.txt.

Step 4: Compute Federal Return

1. Gross Income: W-2 wages (1a) + interest (2b) + dividends (3b) + capital gain/loss (7)
2. Adjustments → AGI (Line 11)
3. Deductions → Taxable Income (Line 15)
4. Tax: use QDCG worksheet if qualified dividends/capital gains exist
5. Credits, other taxes → Total Tax (Line 24)
6. Payments (withholding, estimated) → Refund/Owed
7. If refund: collect direct deposit info (routing, account, type)

Save all line values to work/computations.txt.

Step 5: Compute Capital Gains (if applicable)

1. Form 8949: individual transactions (Part I short-term, Part II long-term)
2. Schedule D: totals, $3,000 loss limitation, carryover calculation
3. Net gain/loss → 1040 Line 7

Rounding rule: Form 8949 and Schedule D must use exact cents matching the 1099-B / 1099-DA source documents. Only Form 1040 rounds to the nearest whole dollar (Line 7 = round of Schedule D Line 16). Do NOT round amounts on 8949 or Schedule D.

Step 6: Compute State Return (CA Form 540)

1. Federal AGI → CA adjustments → CA taxable income
2. Tax from brackets − exemption credits → total tax
3. Withholding → Refund/Owed

Step 7: Download Blank PDF Forms

Save to forms/ directory.

IRS: Use /irs-prior/ for prior-year forms (/irs-pdf/ is always current year):

https://www.irs.gov/pub/irs-prior/f1040--YEAR.pdf
https://www.irs.gov/pub/irs-prior/f8949--YEAR.pdf
https://www.irs.gov/pub/irs-prior/f1040sd--YEAR.pdf

CA: ftb.ca.gov/forms/YEAR/ for state forms.

Verify each download has %PDF- header (not an HTML error page).

Step 8: Discover Field Names & Fill Forms

Discovery — ONCE per form, use --compact

python scripts/discover_fields.py forms/f1040_blank.pdf --compact > work/f1040_fields.json
python scripts/discover_fields.py forms/f8949_blank.pdf --compact > work/f8949_fields.json
python scripts/discover_fields.py forms/f1040sd_blank.pdf --compact > work/f1040sd_fields.json
python scripts/discover_fields.py forms/ca540_blank.pdf --compact > work/ca540_fields.json

--compact outputs a minimal {field_name: description} mapping — each field name is paired with its tooltip/speak description so you can map line numbers to field names directly without manual inspection. Radio buttons include their option values (e.g. {"/2": "Single", "/1": "MFJ"}).

Do NOT use --search repeatedly or --json (which dumps raw metadata and wastes context).

HARD FAIL: If discovery returns 0 human-readable descriptions, STOP. Do not guess field names.

Fill Script

Write output/fill_YEAR.py using scripts/fill_forms.py:

• add_suffix(d) — appends [0] to text field keys. Required for IRS forms.
• fill_irs_pdf(in, out, fields, checkboxes, radio_values) — IRS forms. radio_values for filing status, yes/no, checking/savings.
• fill_pdf(in, out, fields, checkboxes) — CA forms. Matches by /Parent chain + /AP/N keys.

Output filled PDFs to output/.

Step 9: Verify

python scripts/verify_filled.py output/f1040_filled.pdf work/expected_f1040.json

Fix any failures, re-run fill script.

Step 10: Present Results

Show a summary table, verification checklist, capital loss carryover (if any), then:

• Sign your returns — unsigned returns are rejected
• Payment instructions (if owed) — IRS Direct Pay, FTB Web Pay, deadline April 15
• Direct deposit — recommend it for refunds; ask for bank info if not provided
• Filing options — e-file (Free File, CalFile) or mailing addresses

Step 11: MFJ vs Single Comparison (if Married Filing Jointly)

After completing the MFJ return, compute what each spouse would owe if they filed Single instead. This helps the couple understand the tax impact of their filing status choice.

For each spouse, compute a hypothetical Single return:

1. Income: Use only that spouse's W-2, 1099-INT, 1099-DIV, and 1099-B/1099-DA
2. Standard deduction: Single amount (typically half of MFJ)
3. QBI deduction: Based on that spouse's 199A dividends only
4. Tax: Use Single brackets and QDCG worksheet with Single 0%/15%/20% thresholds
5. Credits: Foreign tax credit only if that spouse paid foreign tax
6. Additional Medicare Tax: Use the $200K Single threshold (not $250K MFJ)
7. Withholding: That spouse's W-2 Box 2 only

Present a side-by-side comparison table:

Include key takeaways — especially the Additional Medicare Tax threshold difference ($250K MFJ vs $200K Single per spouse), which is often the largest driver of the MFJ vs Single gap.

Key Gotchas

Context

• NEVER use Read tool on PDFs — use pdfplumber
• NEVER read same document twice — save to work/tax_data.txt
• Field discovery once per form with --compact — no --json (wastes context), no repeated --search

Field Discovery

• Field names change between years — always discover fresh
• XFA template is in /AcroForm → /XFA array, NOT from brute-force xref scanning
• Do NOT use xml.etree for XFA — use regex (IRS XML has broken namespaces)

PDF Filling

• Remove XFA from AcroForm, set NeedAppearances=True, use auto_regenerate=False
• Checkboxes: set both /V and /AS to /1 or /Off
• IRS fields need [0] suffix — use add_suffix()
• IRS checkboxes match by /T directly; radio groups match by /AP/N key via radio_values

Rounding

• Form 8949 & Schedule D: Report exact cents (e.g. "11.36", "-240.00") to match 1099-B / 1099-DA source documents. Never round these.
• Form 1040: Round all amounts to the nearest whole dollar per IRS instructions. Line 7 (capital gain) = nearest-dollar rounding of Schedule D Line 16.
• CA 540: Round to nearest whole dollar.

Form-Specific

• 1040: First few fields (f1_01-f1_03) are fiscal year headers, not name fields. SSN = 9 digits, no dashes. Digital assets = crypto only, not stocks.
• 8949: Box A/B/C checkboxes are 3-way radio buttons. Totals at high field numbers (e.g. f1_115-f1_119), not after last data row. Schedule D lines 1b/8b (from 8949), not 1a/8a.
• Schedule D: Some fields have _RO suffix (read-only) — skip those.
• CA 540: Field names are 540-PPNN (page+sequence, NOT line numbers). Checkboxes end with " CB", radio buttons use named AP keys.
• Downloads: Prior-year IRS = irs.gov/pub/irs-prior/, current = irs.gov/pub/irs-pdf/