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Lesson 31. Refund and Amount Owed. 1040 Lines. Refund 73 – 75 Owe 76 - 77. Calculation. Line 60 – Total Tax Due Less Line 72 – Total Payments = Refund or owe. Refund options. Apply to next year ---- not a good idea Receive it as a check – takes the longest to get
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Lesson 31 Refund and Amount Owed
1040 Lines • Refund 73 – 75 • Owe 76 - 77
Calculation • Line 60 – Total Tax Due • Less Line 72 – Total Payments • = Refund or owe
Refund options • Apply to next year ---- not a good idea • Receive it as a check – takes the longest to get • Direct Deposit – to your existing checking account or creating a USBank debit card – 10-14 days • Purchase Series I Savings Bond – Form 8888 • In Multiples of $50 • Can be put in several options pg 31-3 Always uses the last account for any adjustments • Refund Monitor on Taxwise
If Owe • Submit the return • Amount must be paid by 4/18 • Filing an extension does not extend what you owe • Forms of payment • 1040-V Voucher check or money order • Electronic withdrawal -- Hard to make sure it happens • Credit Card – will have a fee • Electronic Federal Tax Payment System
If Can’t Pay • Have 60 or 120 days with no user fee • Interest and penalties are included if over $1000 • Monthly Payments Form 9465 Installment Agreement Request – IRS person can help you prepare this with the client – includes a user fee • Extension of time due to hardship Form 1127
Exercises and Examples • Exercise pg 31-8 • Example 31-9 • Exercise 31-10
Correcting withholding • Change W-4 Withholding allowances • Caused by change in life: Marriage, children, death, divorce • Exact amount: 1. Amount of total tax line 60 • 2. Divide by number of paychecks • 3. Tax Withholding by payperiod (941) • 4. Look up the number of allowances that match the amount of tax in number 2