1. Chapter 12 Planning Your Tax Strategy Section 12.2 Preparing an Income Tax Return

2. Who Must File?  If you are a citizen of the U.S you are required to file a federal income tax return if your income is above a certain amount  There are 5 status categories –Single (no dependents) –Married (filing a joint return) –Married (filing separate returns) –Head of the household (single with dependents) –Qualifying widow or widower

3. Deadlines and Penalties  April 15 th (unless that day falls on a Saturday or Sunday) then you must file by the next Monday  If you cannot meet the deadline then you can file for an extension  This delays you filing your return but it does not delay your liability, you must send in a check for and estimate of what you owe

4. 1040EZ  (simplest tax form to complete) –Your taxable income is less than 100,000 –You are single or married filing a joint return –You are under the age of 65 –You claim no dependents –Your income consists of only wages, salaries, and no more of 1500 taxable interest –You will not file with itemized deductions, claim any adjustments to income, or claim taz credits

5. 1040A  You have less that 100,00 taxable income  You have capital gains distributions but not capital gains losses  You claim the standard deductions  You claim deductions for IRA contributions  You claim tax credit for child and dependent care, education, adoption, earned income, or retirement contributions  You have deductions for student loan interests, educator expenses, or higher education tuition fees  You have no itemized deductions

6. 1040  Expanded version of the 1040A  This covers income over 100,000 and itemized deductions  Some find this form offer tax advantages because you can list more deductions if you have them

7. Documents and Info for Filing  Tax forms and Instruction booklets  Copies of your old tax returns  You W-2 Form  Interest and Dividends (1099-INT or 1099- DIV)

8. Completing the 1040EZ  Example page 400 #5  We are going to go through and create a practice 1040EZ for Shirley

9. Filing Your Federal Income tax return  You can mail your paper forms to the IRS  You can file electronically –Through a tax professional (Authorized IRS e- file provider) –Tax Software on your own computer

10. Completing Stat Income Tax Returns  There are 7 states that do not require you to file a state tax return –Alaska, Florida, Nevada, South Dakota, Texas, Washington, Wyoming In most states tax range from 1 to 10 percent based on your adjusted gross income. You file your state return at the same time as your federal return Contact your state’s department of revenue or tax board if you need to find out more about your state’s taxes