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Payments

Payments . Line 62 - Federal Income Tax Withheld. The total federal income tax withheld is entered in the Payments section of Form 1040, line 62 Review Pub 4012 (Tab 6), Form 1040, Page 2 – Other Taxes and Payments See Pub 505 , Tax Withholding and Estimated Tax, for more information.

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Payments

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  1. Payments

  2. Line 62 - Federal Income Tax Withheld The total federal income tax withheld is entered in the Payments section of Form 1040, line 62 Review Pub 4012 (Tab 6), Form 1040, Page 2 – Other Taxes and Payments See Pub 505, Tax Withholding and Estimated Tax, for more information
  3. Line 63 - Estimated Tax Payments Estimated tax includes income tax and self-employment tax If estimated payments are not paid when required, or amounts are insufficient, a penalty could be imposed For more information about estimated taxes, refer to Form 1040-ES

  4. Line 64– Earned Income Credit (EIC)

  5. What is the EIC? A refundable tax credit available to eligible taxpayers who do not earn high incomes Qualifying taxpayers can receive a refund even if they have no filing requirement, owe no tax, and had no income tax withheld
  6. Qualifying for the EIC Three sets of rules: General eligibility rules for everyone Rules for taxpayers with one or more qualifying children Rules for taxpayers who do not have a qualifying child Review Pub 4012 (Tab H), Summary of EIC Eligibility Requirements; focus on Part A and Part D Child born in 2013 considered living in the home for 1 year.
  7. Qualifying for the EIC What are some example of earned income that may qualify taxpayers for the EIC? Wages, salaries, tips, and other taxable employee pay Taxable long-term disability benefits received prior to minimum retirement age See Pub 4012 (Tab H) Earned Income Table for a complete list
  8. Rules for Taxpayers with Qualifying Children Review Pub 4012 (Tab H): Summary of EIC Eligibility Requirements, Part B EIC General Eligibility Rules Interview Tips EIC with a Qualifying Child Interview Tips Qualifying Child of More than One Person
  9. Rules for Taxpayers without Qualifying Children Rules are presented in Pub 4012 (Tab H) Part C, and in the Interview Tips Must be at least age 25 but under age 65 as of December 31 Cannot be the dependent of another person Check Part I, question 13 on Form 13614-C Must have lived in the U. S. more than half the year
  10. Calculating the Tax Credit Check Part V, question 4 on Form 13614-C: Did you (or your spouse) have EIC disallowed in a prior year? If yes, see the special rules in Pub 4012 (Tab H), Disallowance of the Earned Income Credit TaxWise will calculate the amount of EIC Use Schedule EIC if the taxpayer has at least one qualifying child
  11. Line 68 - Payments and Extensions Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, extends the time to file until Oct. 15 An extension must be filed electronically or on paper by the due date of the return Review Pub 4012 (Tab 6), Filing for an Extension Using TaxWise

  12. Lines 74 and 76– Refund and Amount of Tax Owed

  13. Refund or Tax Due The taxpayer’s total tax appears in the Other Taxes section of Form 1040, line 61 The taxpayer’s total tax payments already made (including refundable credits) appears in the Payments section of Form 1040, line 72 If payments made exceed the amount of tax liability, the amount of the overpayment appears in the Refund section of Form 1040, line 73 Form 8888, Allocation of Refund, is used to deposit a refund into up to three bank accounts For more information, review Pub 4012: Tab 6, Split Refund Option Tab 12, Pointers for Direct Deposit of Refunds Tab 12, Balance Due Returns Double-check accuracy of routing and account numbers for direct deposit refunds
  14. Amount Owed Payment options for taxes owed are: Check or money order submitted with Form 1040-V, Payment Voucher Electronic funds withdrawal Credit card Electronic Federal Tax Payment System (EFTPS) Review Pub 4012 (Tab 12), Balance Due Returns whenever you prepare a return that has an amount owed Taxpayers who cannot pay the full amount owed may request one of the following agreements: Pay in full within 60 or 120 days with no fee Monthly installment payments using Form 9465, Installment Agreement Request, with a fee
  15. Estimated Tax Penalty Estimated tax penalty may apply for underpayment of estimated taxes Most taxpayers must make estimated tax payments if they expect to owe at least $1,000 in tax (after subtracting withholding and credits) Estimated tax penalty is reported on Form 1040, line 77 Change withholding amounts on Forms W-4 and W-4P
  16. Third Party Designees Volunteer tax preparers must never be designated as the third party designee
  17. Avoiding Errors Errors in bank account information may result in significant delays or misdirected funds Double- and triple-check bank routing and account numbers for direct deposit and electronic funds withdrawal
  18. Check Routing and Account Numbers Use a check NOT a deposit slip because the routing number may be different than on a check.
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