Tax Payments

Tax PaymentsForm 1040 Lines 62-72Pub 4012 Tab 6

4491-28 Payments v11.0 VO.pptx12/29/20111Tax Law Training (NJ) TY2011 v11.0Notes/Handouts1/6/2012NJ Training TY 200811ObjectivesAmounts that can be applied against tax liability:Federal income tax withheld from W-2s, Federal income tax withheld from 1099sEstimated tax payments Amounts applied from prior years returnVarious refundable creditsPayments made with a request for extension

12/29/20112Tax Law Training (NJ) TY2011 v11.0Notes/Handouts1/6/2012NJ Training TY 20082Estimated PaymentsMeans of payment for:Self-employedThose with Investment IncomeProjected tax due with return >$1,000

Payments made periodically by taxpayerNeed to know When and How Much for each payment

12/29/20113Tax Law Training (NJ) TY2011 v11.0Notes/Handouts1/6/2012NJ Training TY 20083Estimated Tax Payments TWLink from 1040 Line 62 to F/S Tax Pd and insert estimated payments for both Federal and StateReport in box From Last year Overpayment from prior year applied to current year Estimated taxesState: Insert estimated payments and alsoState taxes paid this year applicable to prior year(s)State estimated taxes paid in January current year for prior yearTax Wise includes latter two amounts in State Taxes Paid on Federal Schedule A, Itemized Deductions

12/29/20114Tax Law Training (NJ) TY2011 v11.0Notes/Handouts1/6/2012NJ Training TY 200844Federal Estimated Tax Payments

12/29/20115Tax Law Training (NJ) TY2011 v11.0Notes/Handouts1/6/2012NJ Training TY 20085Wrong year in payment dates - do we care?Overpayment From Prior YearCan elect to have refund applied to next years return

Ask TP if prior year refund was applied to current year taxes

12/29/20116Tax Law Training (NJ) TY2011 v11.0Notes/Handouts1/6/2012NJ Training TY 20086Making Work Pay Retiree Credits (Schedule M)Refundable CreditEconomic Recovery PaymentS/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 doneOtherwise - Can lookup on IRS websiteMaking Work Pay Credit, if any, reduced by Economic Recovery Payment received (See Sch M)

12/29/20117Tax Law Training (NJ) TY2011 v11.0

Notes/Handouts1/6/2012NJ Training TY 20087Refundable Education Credit (Form 8863)Entitled to this credit if T/P did not get full benefit of non-refundable American Opportunity (Hope) creditRefundable credit is 40% of unused portion of non-refundable credit Max of $1,000Taxwise will automatically calculate

12/29/20118Tax Law Training (NJ) TY2011 v11.0

Notes/Handouts1/6/2012NJ Training TY 20088Payments Made With Extension To FileTaxpayer requests extension to fileMust pay estimated Balance due with extension

Amount paid with Extension reported on final return, Form 1040, line 68

12/29/20119Tax Law Training (NJ) TY2011 v11.0Notes/Handouts1/6/2012NJ Training TY 20089REFUNDABLE CREDITS QUIZ #1Which of the following are automatically calculated in TaxWise:Federal Income Tax WithholdingEstimated taxesEarned Income CreditAdditional Child Tax CreditRefundable American Opportunity Credit

Answer: It depends on your definition of calculated discuss as appropriate12/29/201110Tax Law Training (NJ) TY2011 v11.0