1. Tax Payments Form 1040 Lines 61-71 Pub 4012 Tabs H, 6
Notes/Handouts
4/13/2018
Payments v1.0 VO.ppt
Tax Payments
Form Lines 61-71
Pub Tabs H, 6
Pub 17 Chapter 36
LEVEL 2 TOPIC
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2. Objectives Amounts that can be applied against tax liability:
Notes/Handouts
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Objectives
Amounts that can be applied against tax liability:
Federal income tax withheld from W-2s,
Federal income tax withheld from 1099s
Estimated tax payments
Amounts applied from prior year’s return
Various refundable credits
Payments made with a request for extension
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3. Estimated Payments Means of payment for:
Notes/Handouts
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Estimated Payments
Means of payment for:
Self-employed
Those with Investment Income
Projected tax due with return >$1,000
Payments made periodically by taxpayer
Need to know “When” and “How Much” for each payment
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4. Estimated Tax Payments – TW
Notes/Handouts
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Estimated Tax Payments – TW
Link from 1040 Line 62 to “F/S Tax Pd” and insert estimated payments for both Federal and State
Report in box “From Last year” Overpayment from prior year applied to current year Estimated taxes
State: Insert estimated payments and also
State taxes paid this year applicable to prior year(s)
State estimated taxes paid in January current year for prior year
Tax Wise includes latter two amounts in State Taxes Paid on Federal Schedule A, Itemized Deductions
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5. Federal Estimated Tax Payments
Notes/Handouts
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Federal Estimated Tax Payments
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6. Overpayment From Prior Year
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Overpayment From Prior Year
Can elect to have refund applied to next year’s return
Ask TP if prior year refund was applied to current year taxes
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7. Making Work Pay Retiree Credits (Schedule M)
Notes/Handouts
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Making Work Pay Retiree Credits (Schedule M)
Refundable Credit
Making Work Pay
Must have earned income
6.2% of earned income – Max of $400 ($800 MFJ)
Phase-outs based on income
T/P claimed as dependent not eligible
Economic Recovery Payment
S/S, SSI, Railroad Retirement and Vets Disability $250 ($500 MFJ)
Vast majority already received this in TY2009, but there may people who got it late (in TY2010)
Look at TY2009 return Sch M – if shown, then done
Otherwise - Can lookup on IRS website
Making Work Pay Credit, if any, reduced by Economic Recovery Payment received (See Sch M)
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8. Refundable Education Credit (Form 8863)
Notes/Handouts
4/13/2018
Refundable Education Credit (Form 8863)
Entitled to this credit if T/P did not get full benefit of non-refundable American Opportunity (Hope) credit
Refundable credit is 40% of unused portion of non-refundable credit – Max of $1,000
Taxwise will automatically calculate
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9. First-Time Homebuyer Credit
Notes/Handouts
4/13/2018
First-Time Homebuyer Credit
Refundable credit up to $8,000
Settlement must be between 04/09/2009 and 09/30/2010 (inclusive)
Note: Must have binding contract by 04/30/2010
“First Time” means did not own principal residence in 36 months prior to purchase
Credit must be repaid if home ceases to be TP’s principal residence within 36 months of purchase
Credit for purchase made in 2010 can be claimed on 2010 or 2009 tax return
Credit reduced or eliminated for high income TPs
Form 5405 to claim credit (documents must be attached so NO E-FILE allowed)
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10. Credit for Long Time Homeowner Buying a Replacement Home
Notes/Handouts
4/13/2018
Credit for Long Time Homeowner Buying a Replacement Home
Refundable credit up to $6,500
“Long Time” means owned principal residence for any 5-year consecutive period during 8 years ending on date of replacement home purchase
See previous slide for other conditions (dates, repayment, no e-file, etc.)
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11. Payments Made With Extension To File
Notes/Handouts
4/13/2018
Payments Made With Extension To File
Taxpayer requests extension to file
Must pay estimated Balance due with extension
Amount paid with Extension reported on final return, Form 1040, line 68
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12. REFUNDABLE CREDITS QUIZ #1
Which of the following are automatically calculated in TaxWise:
Federal Income Tax Withholding
Estimated taxes
Making Work Pay Credit
Earned Income Credit
Additional Child Tax Credit
Refundable American Opportunity Credit
First Time Home Buyer Credit
Answer: It depends on your definition of “calculated” – discuss as appropriate…
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