...Federal Income Taxes I Instructor: Arlene Rivero July 30, 2012 I used Form 1040 because Appendix A called for a Married filing jointly return, with credits and Itemized Deductions. This return was a tad tricky until I realized that the W2 information required me to utilized Box 12 for the IRA (k) contribution (payroll deductions) and Box 14 for the Healthcare costs (payroll deductions). Also; tricky situation occurred that I am not accustomed to. I needed to add to Box 14 for the SDI (mandatory disability insurance). It appears that California requires this deduction. Living and filing out my own income taxes forms in Utah, I never had to work with a mandatory SDI deduction before. Once I figured out the income from the W-2’s ($90,916.00 from line 7, on form 1040), I then needed to figure out the income from the sales of their home. I should have received a Form 1099-S from the sale of the primary residence. I then proceeded to figure out the gain on the sale of the home and ascertain if it should be taxed. According to the IRS: Gain: 1. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases). 2. If you can exclude all of the gain, you do not need to report the sale on your tax return. 3. If you have gain that cannot be excluded, it is taxable. Report it on Schedule D (Form 1040) (IRS.gov, 2010). So, the first thing I had to do was figure out the gain...
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...Form 1040 2014 (99) Department of the Treasury—Internal Revenue Service U.S. Individual Income Tax Return For the year Jan. 1–Dec. 31, 2014, or other tax year beginning Your first name and initial , 2014, ending MELISSA IRS Use Only—Do not write or staple in this space. See separate instructions. Last name DOWDY If a joint return, spouse’s first name and initial OMB No. 1545-0074 , 20 Last name Your social security number 256 47 4410 Spouse’s social security number Apt. no. Home address (number and street). If you have a P.O. box, see instructions. Make sure the SSN(s) above and on line 6c are correct. 12821 SNOWVIEW CT City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). VICTORVILLE, CA 92392 Foreign country name Filing Status Check only one box. Exemptions Foreign province/state/county 1 2 3 6a b c Single Married filing jointly (even if only one had income) X Head of household (with qualifying person). (See instructions.) If the qualifying person is a child but not your dependent, enter this child’s name here. 5 Qualifying widow(er) with dependent child Yourself. If someone can claim you as a dependent, do not check box 6a . Spouse . Dependents: . . . . . . . . . . . (2) Dependent’s social security number Last name JUAN FERNANDEZ JR MALLORY...
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...2 Royalties 2012 Form 1099-MISC FDEA0302 4 Federal income tax withheld Miscellaneous Income 08/16/12 $ NY 10458 MARILYN PEREZ RECIPIENT’S identification number 3 Other income $ 5 Fishing boat proceeds $ 6 Med & health care payments Substitute payments in lieu of dividends or interest Crop insurance proceeds Copy B For Recipient This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported. PAYER’S federal identification number 086-98-8404 $ 7 Nonemployee compensation Payer made direct sales of $5,000 or more of consumer products to a buyer (recipient) for resale $ 8 10 NATIVIDAD VILLAMAR Street address (including apartment number) $ 9 15600.00 $ 317 E. 201ST APT 3 City State ZIP code G $ 12 14 17 Gross proceeds paid to an attorney State/Payer’s state no. 11 BRONX Account number (see instructions) NY 10458 15 b Section 409A income 13 Excess golden parachute payments State tax withheld $ 16 18 State income 15 a Section 409A deferrals $ BAA Form 1099-MISC $ $ $ $ $ Department of the Treasury ' Internal Revenue Service (Keep for your records.) Instructions for Recipient Recipient’s identification number. For your protection, this form may show only the last...
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...SCHEDULE D (Form 1040) Department of the Treasury Internal Revenue Service (99) Name(s) shown on return ▶ Capital Gains and Losses ▶ Attach to Form 1040 or Form 1040NR. Information about Schedule D and its separate instructions is at www.irs.gov/form1040. ▶ Use Form 8949 to list your transactions for lines 1, 2, 3, 8, 9, and 10. OMB No. 1545-0074 Attachment Sequence No. 12 2012 Your social security number Part I Short-Term Capital Gains and Losses—Assets Held One Year or Less (d) Proceeds (sales price) from Form(s) 8949, Part I, line 2, column (d) (g) Adjustments to (e) Cost or other basis gain or loss from Form(s) 8949, Part Form(s) 8949, from I, Part I, line 2, column (e) line 2, column (g) (h) Gain or (loss) Subtract column (e) from column (d) and combine the result with column (g) Complete Form 8949 before completing line 1, 2, or 3. This form may be easier to complete if you round off cents to whole dollars. 1 Short-term totals from all Forms 8949 with checked in Part I . . . . . . . . . . 2 Short-term totals from all Forms 8949 with checked in Part I . . . . . . . . . . 3 Short-term totals from all Forms 8949 with checked in Part I . . . . . . . . . . box . . box . . box . . A . B . C . 4 Short-term gain from Form 6252 and short-term gain or (loss) from Forms 4684, 6781, and 8824 . 5 Net short-term gain or (loss) from partnerships, S corporations, estates, and trusts from Schedule(s) K-1 . . . . . . . . . . . . . . . . . . . . . . . . . . ...
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...are multiple specific items that needed to be taken care of and specific forms that needed to be used. In the case of many Federal Income Taxes, these specific things occur taxpayer by taxpayer and will need to be taken on a case by case basis in order to best determine the route necessary to be taken to ensure the correct information is given and the correct tax return is received. Following the proper procedure in each case will ensure the correct return and proper information to be given to the IRS. For this specific return, the form for a married return, filing jointly was used. This means a Form 1040 was necessary in this case, as it allows for a married filing jointly return with itemized deductions and credits. The stumbling points in this return fall to the IRA contributions and the healthcare costs. In the case of the IRA contributions, Box 12 from the W-2 is necessary to be used to account for the payroll deductions that take place. For the Healthcare payroll deduction contributions, Box 14 must be used on the 1040 Form. Now, a tricky point was the addition of SDI, or mandatory disability insurance, that needed to be added to box 14 as well, since the deduction is something that is required in California. Once the specifics for the standard income are set, once must move on to the income from the sale of the home for the previous year. The sale of the home would have triggered a Form 1099-S, as this is standard for the sale of a Primary Residence. The amount...
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...COVER PAGE Filing Checklist For 2010 Tax Return Filed On Standard Forms Prepared on: 08/11/2011 07:03:55 am Return: C:\Users\user\Documents\HRBlock\Alfred Old 2010 Tax Return.T10 To file your 2010 tax return, simply follow these instructions: Step 1 - Sign and date the return Because you're filing a joint return, Alfred and Beulah both need to sign the tax return. If your return is signed by a representative for you, you must have a power of attorney attached that specifically authorizes the representative to sign your return. To do this, you can use Form 2848, Power of Attorney and Declaration of Representative. Step 2 - Assemble the return These forms should be assembled behind Form 1040 --U.S. Individual Income Tax Return - Schedule A - Schedule M Staple these documents to the front of the first page of the return: Form W-2: Wage and Tax Statement 1st (Cherry, Inc.) 2nd (Legal Aid Society, Inc.) Step 3 - Mail the return Mail the return to this address: Department of the Treasury Internal Revenue Service [If filing before July 1, 2011:] Atlanta, GA 39901-0002 [If filing after June 30, 2011:] Kansas City, MO 64999-0002 We recommend that you use one of these IRS-approved methods to send your return. Retain the proof of mailing to avoid a late filing penalty: - U.S. Postal Service certified mail. - DHL Same Day Service. - FedEx Priority Overnight, Standard Overnight, 2Day, International Priority, or International First. - United Parcel Service Next Day Air, Next Day Air Saver...
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...of the year that every tax paying citizen of the United States has to file their annual income tax. I will be using an example of Harold & Sarah Petersan to explain how to file a form 1040. While I will explain Form 1040, I will include the examples for Schedule A, itemized deductions, and form 2441, child and dependent care expense. Harold and Sarah will be using form 1040 to file their income tax because they have a child and they sold their house during the tax year. At the top of the form on page one is where the taxpayer(s) enter their personal information, including name, address, and social security numbers. Then they will check married filing jointly for their filing status. The next section is exemptions. This section is where you claim your dependents. This includes their name, social security number and relationship to the taxpayer; check the box if the qualifying child is for the child tax credit which in this case, check the box. Then you add the number of exemptions, this includes the tax payer, spouse, dependents who lived with you, dependents who did not live with you due to divorce or separation, and final other dependents. Harold and Sarah will be claiming 3 exemptions, Harold, Sarah, and Tara (their 7 year old daughter who lives with them). The next section on form 1040 is the income section. This is where you include income from wages, salaries, tips, taxable income, ordinary dividends, alimony, business income, capital gain (loss), IRA’s, pensions...
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...1 Tax Credits / Alternative Minimum Tax Federal Tax I Fall 2012 OVERVIEW: This handout summarizes the Tax Credits and Alternative Minimum Tax topics in chapter 7 of your textbook. These are the last topics we will be covering this semester, and as previously discussed I am providing this handout supplementing the material contained in your text due to the time we lost because of Storm Sandy. The material on Tax Credits is contained on pages 7-23 – 7-34 (11 pages) of your textbook. The material on AMT (Alternative Minimum Tax) is covered on pages 7-8 – 7-14 (7 pages). So this is only 18 pages of chapter 7. We covered the rest of chapter 7 earlier this semester prior to exam 2. Tax Credits: As you will recall from very early in the semester, tax credits are a direct dollar for dollar reduction of our income tax liability. We looked at the value of a tax credit compared to the value of a tax deduction. Tax credits can either be nonrefundable or refundable. A nonrefundable credit will reduce a taxpayer’s tax liability, but never below zero. A refundable credit, on the other hand, will go even further. If the credit is large enough to reduce a taxpayer’s tax liability to zero, the excess credit will be refunded to the taxpayer (i.e. treated as additional tax paid in. Example 1: Tom has a tax liability of $ 3,000, a nonrefundable credit of $ 4,000, and federal tax withheld of $ 1,500. Calculate Tom’s refund: Tax Liability Less: credit Net tax Less Withholding Refund $ 3,000 ( 3...
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...SCHEDULE A (Form 1040) Department of the Treasury Internal Revenue Service (99) Name(s) shown on Form 1040 ▶ Information Itemized Deductions about Schedule A and its separate instructions is at www.irs.gov/form1040. ▶ Attach to Form 1040. OMB No. 1545-0074 Attachment Sequence No. 07 Your social security number 2012 Medical and Dental Expenses Taxes You Paid Interest You Paid Note. Your mortgage interest deduction may be limited (see instructions). Caution. Do not include expenses reimbursed or paid by others. Medical and dental expenses (see instructions) . . . . . 1 Enter amount from Form 1040, line 38 2 Multiply line 2 by 7.5% (.075) . . . . . . . . . . . 3 Subtract line 3 from line 1. If line 3 is more than line 1, enter -0- . . State and local (check only one box): a Income taxes, or . . . . . . . . . . . 5 b General sales taxes 6 Real estate taxes (see instructions) . . . . . . . . . 6 7 Personal property taxes . . . . . . . . . . . . . 7 8 Other taxes. List type and amount ▶ 8 9 Add lines 5 through 8 . . . . . . . . . . . . . . . . 10 Home mortgage interest and points reported to you on Form 1098 10 11 Home mortgage interest not reported to you on Form 1098. If paid to the person from whom you bought the home, see instructions and show that person’s name, identifying no., and address ▶ 1 2 3 4 5 . . . . . . 4 } . . . . . . 9 11 12 Points not reported to you on Form 1098. See instructions for special...
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...Form 1040 Department of the Treasury - Internal Revenue Service (99) U.S. Individual Income Tax Return Last name 2012 OMB No. 1545-0074 , 2012, ending , 20 IRS Use Only-Do not write or staple in this space. For the year Jan. 1-Dec. 31, 2012, or other tax year beginning Your first name and initial See separate instructions. Your social security number Same A If a joint return, spouse's first name and initial Morris Last name 741-85-2963 Spouse's social security number Sarah B Home address (number and street). Morris Apt. no. 321-65-4987 Make sure the SSN(s) above and on line 6c are correct. Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. 54321 Gala Avenue City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). Tyler Foreign country name TX 1 2 3 Single X Married filing jointly (even if only one had income) Married filing separately. Enter spouse's SSN above and full name here. 75701 Foreign postal code Foreign province/state/county You Spouse Filing Status Check only one box. 4 Head of household (with qualifying person). (See instructions.) If the qualifying person is a child but not your dependent, enter this child's name here. 5 Qualifying widow(er) with dependent child Boxes checked on 6a and 6b No...
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...SCHEDULE B (Form 1040A or 1040) Interest and Ordinary Dividends ▶ OMB No. 1545-0074 Attach to Form 1040A or 1040. Department of the Treasury Internal Revenue Service (99) ▶ Information about Schedule B (Form 1040A or 1040) and its instructions is at www.irs.gov/scheduleb. Name(s) shown on return Attachment Sequence No. 08 Your social security number 2013 Amount Part I Interest (See instructions on back and the instructions for Form 1040A, or Form 1040, line 8a.) Note. If you received a Form 1099-INT, Form 1099-OID, or substitute statement from a brokerage firm, list the firm’s name as the payer and enter the total interest shown on that form. 1 List name of payer. If any interest is from a seller-financed mortgage and the buyer used the property as a personal residence, see instructions on back and list this interest first. Also, show that buyer’s social security number and address ▶ Interest on certificate of deposits 3300 1 Part II Ordinary Dividends (See instructions on back and the instructions for Form 1040A, or Form 1040, line 9a.) Note. If you received a Form 1099-DIV or substitute statement from a brokerage firm, list the firm’s name as the payer and enter the ordinary dividends shown on that form. Add the amounts on line 1 . . . . . . . . . . Excludable interest on series EE and I U.S. savings Attach Form 8815 . . . . . . . . . . . . . 4 Subtract line 3 from line 2. Enter the result here and 1040, line 8a . . . . . . . . . ....
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...from a savings account at ABC Bank, and $3,000 is interest on NY state bonds. 4. Henry’s salary is $50,000, and Helen’s is $70,000. 5. Helen paid $4,000 in alimony to a former spouse, Ben Johnson. Alimony is a deduction FOR AGI. 6. They had a total of $ 14,000 federal income tax withheld, of which $5,000 was withheld from Henry’s paycheck and $9,000 was withheld from Helen’s paycheck. 7. They contributed $1,500 to qualifying charitable organizations during 2012. This charitable contribution and their New York income tax withholding amounts, which together totaled $6,000, are the only amounts that would qualify as itemized deductions. 8. The Cummings qualify for a “Child tax credit” in the amount of $1,600 (line 51, Form 1040, p. 2). DUE DATE: PART I AND PART II are both subject to collection on Thursday, 2/21 (beginning of class) REQUIREMENTS: If you worked in a group for Part I, you must work in that group for Part II. Each of the two parts, Part I and Part II, will need to have the pages for that...
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...2010 Instructions for Form 2441 (Rev. January 2011) Child and Dependent Care Expenses Purpose of Form If you paid someone to care for your child or other qualifying person so you (and your spouse if filing jointly) could work or look for work in 2010, you may be able to take the credit for child and dependent care expenses. You (and your spouse if filing jointly) must have earned income to take the credit. But see Spouse Who Was a Student or Disabled on page 4. If you can take the credit, use Form 2441 to figure the amount of your credit. If you (or your spouse if filing jointly) received any dependent care benefits for 2010, you must use Form 2441 to figure the amount, if any, of the benefits you can exclude from your income on Form 1040, line 7, Form 1040A, line 7, or Form 1040NR, line 8. You must complete Part III of Form 2441 before you can figure the credit, if any, in Part II. Additional information. See Pub. 503, Child and Dependent Care Expenses, for more details. Department of the Treasury Internal Revenue Service If you are divorced or separated, see Special rule for children of divorced or separated parents below. To find out who is a qualifying child and who is a dependent, see Pub. 501, Exemptions, Standard Deduction, and Filing Information. CAUTION ! To be a qualifying person, the person must have lived with you for more than half of 2010. Definitions Dependent Care Benefits Dependent care benefits include: • Amounts your employer paid directly...
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...SCHEDULE C (Form 1040) Profit or Loss From Business OMB No. 1545-0074 2014 (Sole Proprietorship) Information about Schedule C and its separate instructions is at www.irs.gov/schedulec. Attach to Form 1040, 1040NR, or 1041; partnerships generally must file Form 1065. Department of the Treasury Internal Revenue Service (99) Attachment Sequence No. 09 Name of proprietor Social security number (SSN) A Principal business or profession, including product or service (see instructions) B Enter code from instructions C Business name. If no separate business name, leave blank. D Employer ID number (EIN), (see instr.) E Business address (including suite or room no.) F G H City, town or post office, state, and ZIP code Cash (2) Accrual (3) Other (specify) Accounting method: (1) Did you “materially participate” in the operation of this business during 2014? If “No,” see instructions for limit on losses If you started or acquired this business during 2014, check here . . . . . . . . . . . . . . . . . I J Did you make any payments in 2014 that would require you to file Form(s) 1099? (see instructions) . If "Yes," did you or will you file required Forms 1099? . . . . . . . . . . . . . . Part I Income . . . . 2 3 Gross receipts or sales. See instructions for line 1 and check the box if this income was reported to you on Form W-2 and the “Statutory employee” box on that form was checked . . . . ...
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...allowable deductions. Adjusted gross income is important to individual income taxation because it controls individual qualification for numerous deductions and credits. Besides, it can affect individual eligibility for retirement plans. (B) How does ADJUSTED GROSS INCOME AFFECT: (1) Medical Deduction on Form 1040, Schedule A Only the part of medical expenses that exceed 7.5% of the amount on Form 1040, line 38 is deductible. To the extent you were not reimbursed, you can deduct the amount you paid for: Prescription medicines or insulin, Medical examination, diagnostic test etc. (2) Miscellaneous Itemized Deduction on Form 1040, Schedule A This is subject to expense that is more than 2 % of your adjusted gross income. This 2% limit can only be applied after you apply any other deduction limit. For example, unreimbursed employee expenses, Tax preparation fee, and all other expenses that will appear on line 11 of Form 1040. (3) The Deduction for Charity on Form 1040, Schedule A Donations to charity are tax deductible expenses but subject to limitation.1) you must make an assessment of the fair market value of the property you contribute. 2) You must attach IRS Form 8283 if your total non-cash contribution exceeds $500. 3) If you contribute a car, truck, boat, airplane, or other vehicle, and the vehicle is worth more than $500, you must received a written acknowledgement from the non-profit before you can claim a tax deduction. 4) If you contribute property worth more...
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