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Income Tax Preparation Software

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Income Tax Preparation Software

Income tax preparation software 5. Income tax preparation software   Illustrated Examples Table of Contents Illustrated Example of Form 4563Line 1. Income tax preparation software Line 2. Income tax preparation software Lines 3a and 3b. Income tax preparation software Lines 4a and 4b. Income tax preparation software Line 5. Income tax preparation software Line 6. Income tax preparation software Line 7. Income tax preparation software Line 9. Income tax preparation software Line 15. Income tax preparation software Illustrated Example of Form 5074Part I. Income tax preparation software Part II. Income tax preparation software Part III. Income tax preparation software Illustrated Example of Form 8689Part I. Income tax preparation software Part II. Income tax preparation software Part III. Income tax preparation software Part IV. Income tax preparation software Use the following examples to help you complete the correct attachment to your Form 1040. Income tax preparation software The completed form for each example is shown on the pages that follow. Income tax preparation software Illustrated Example of Form 4563 John Black is a U. Income tax preparation software S. Income tax preparation software citizen, single, and under 65. Income tax preparation software He was a bona fide resident of American Samoa during all of 2013. Income tax preparation software John must file Form 1040 because his gross income from sources outside the possessions ($10,000 of dividends from U. Income tax preparation software S. Income tax preparation software corporations) is more than his adjusted filing requirement for single filers under 65. Income tax preparation software (See Filing Requirement if Possession Income Is Excluded in chapter 4. Income tax preparation software ) Because he must file Form 1040 (not illustrated), he fills out Form 4563 to determine the amount of income from American Samoa he can exclude. Income tax preparation software See Bona Fide Resident of American Samoa in chapter 3. Income tax preparation software Completing Form 4563. Income tax preparation software   John enters his name and social security number at the top of the form. Income tax preparation software Line 1. Income tax preparation software   On Form 4563 (see later), John enters the date his bona fide residence began in American Samoa, June 2, 2012. Income tax preparation software Because he is still a bona fide resident, he enters “not ended” in the second blank space. Income tax preparation software Line 2. Income tax preparation software   He checks the box labeled “Rented house or apartment” to describe his type of living quarters in American Samoa. Income tax preparation software Lines 3a and 3b. Income tax preparation software   He checks “No” on line 3a because no family members lived with him. Income tax preparation software He leaves line 3b blank. Income tax preparation software Lines 4a and 4b. Income tax preparation software   He checks “No” on line 4a because he did not maintain a home outside American Samoa. Income tax preparation software He leaves line 4b blank. Income tax preparation software Line 5. Income tax preparation software   He enters the name and address of his employer, Samoa Products Co. Income tax preparation software It is a private American Samoa corporation. Income tax preparation software Line 6. Income tax preparation software   He enters the dates of his 2-week vacation to New Zealand from November 11 to November 25. Income tax preparation software That was his only trip outside American Samoa during the year. Income tax preparation software Line 7. Income tax preparation software   He enters the $24,000 in wages he received from Samoa Products Co. Income tax preparation software Line 9. Income tax preparation software   He received $220 in dividends from an American Samoa corporation, which he enters here. Income tax preparation software He also received $10,000 of dividends from a U. Income tax preparation software S. Income tax preparation software corporation, but he will enter that amount only on his Form 1040 because the U. Income tax preparation software S. Income tax preparation software dividends do not qualify for the possession exclusion. Income tax preparation software Line 15. Income tax preparation software   John totals the amounts on lines 7 and 9 to get the amount he can exclude from his gross income in 2013. Income tax preparation software He will not enter his excluded income on Form 1040. Income tax preparation software However, he will attach his completed Form 4563 to his Form 1040. Income tax preparation software Illustrated Example of Form 5074 Tracy Grey is a U. Income tax preparation software S. Income tax preparation software citizen who is a self-employed fisheries consultant with a tax home in New York. Income tax preparation software Her only income for 2013 was net self-employment income of $80,000. Income tax preparation software Of the $80,000, $20,000 was from consulting work in Guam and the rest was earned in the United States. Income tax preparation software Thinking she would owe tax to Guam on the $20,000, Tracy made estimated tax payments of $1,409 to Guam. Income tax preparation software She was not a bona fide resident of Guam during 2013. Income tax preparation software Tracy completes Form 1040 (not illustrated), reporting her worldwide income. Income tax preparation software Because the adjusted gross income on her Form 1040 was $50,000 or more and at least $5,000 of her gross income is from Guam, Tracy must file Form 5074 with her Form 1040. Income tax preparation software All amounts reported on Form 5074 are also reported on her Form 1040. Income tax preparation software See U. Income tax preparation software S. Income tax preparation software Citizen or Resident Alien (Other Than a Bona Fide Resident of Guam) in chapter 3. Income tax preparation software Completing Form 5074. Income tax preparation software   Tracy enters her name and social security number at the top of the form. Income tax preparation software Part I. Income tax preparation software   On Form 5074 (see later), Tracy enters her self-employment income from Guam ($20,000) on line 6. Income tax preparation software She has no other income from Guam, so the total on line 16 is $20,000. Income tax preparation software Part II. Income tax preparation software   Tracy's only adjustment in Part II is the deductible part of the self-employment tax on her net income earned in Guam. Income tax preparation software She enters $1,413 on line 21 and line 28. Income tax preparation software Her adjusted gross income on line 29 is $18,587. Income tax preparation software Part III. Income tax preparation software   Tracy made estimated tax payments of $1,409. Income tax preparation software She enters this amount on line 30, and again on line 34 as the total payments. Income tax preparation software Illustrated Example of Form 8689 Juan and Carla Moreno live and work in the United States. Income tax preparation software In 2013, they received $14,400 in income from the rental of a condominium they own in the U. Income tax preparation software S. Income tax preparation software Virgin Islands (USVI). Income tax preparation software The rental income was deposited in a bank in the USVI and they received $500 of interest on this income. Income tax preparation software They were not bona fide residents of the USVI during the entire tax year. Income tax preparation software The Morenos complete Form 1040 (not illustrated), reporting their income from all sources, including their interest income and the income and expenses from their USVI rental property (reported on Schedule E (Form 1040)). Income tax preparation software The Morenos take the standard deduction for married filing jointly, both are under 65, and they have no dependents. Income tax preparation software The Morenos also complete Form 8689 to determine how much of their U. Income tax preparation software S. Income tax preparation software tax shown on Form 1040, line 61 (with certain adjustments), must be paid to the U. Income tax preparation software S. Income tax preparation software Virgin Islands. Income tax preparation software See U. Income tax preparation software S. Income tax preparation software Citizen or Resident Alien (Other Than a Bona Fide Resident of the USVI) in chapter 3. Income tax preparation software The Morenos file their Form 1040, attaching Form 8689 and all other schedules, with the Internal Revenue Service. Income tax preparation software At the same time, they send a copy of their Form 1040 with all attachments, including Form 8689, to the Virgin Islands Bureau of Internal Revenue. Income tax preparation software The Virgin Islands Bureau of Internal Revenue will process this copy. Income tax preparation software Completing Form 8689. Income tax preparation software   Juan and Carla enter their names and Juan's social security number at the top of the form. Income tax preparation software Part I. Income tax preparation software   The Morenos enter their income from the USVI in Part I (see later). Income tax preparation software The interest income is entered on line 2 and the net rental income of $6,200 ($14,400 of rental income minus $8,200 of rental expenses) is entered on line 11. Income tax preparation software The Morenos' total USVI income of $6,700 is entered on line 16. Income tax preparation software Part II. Income tax preparation software   The Morenos have no adjustments to their USVI income, so they enter zero (-0-) on line 28, and $6,700 on line 29. Income tax preparation software Their USVI adjusted gross income (AGI) is $6,700. Income tax preparation software Part III. Income tax preparation software   On line 30, the Morenos enter the amount from Form 1040, line 61 ($4,539). Income tax preparation software Their Form 1040 does not show any entries required on line 31, so they leave that line blank and enter $4,539 on line 32. Income tax preparation software   The Morenos enter their worldwide AGI, $54,901 (Form 1040, line 38), on line 33. Income tax preparation software Next, they find what percentage of their AGI is from USVI sources ($6,700 ÷ $54,901 = 0. Income tax preparation software 122) and enter that as a decimal on line 34. Income tax preparation software They then apply that percentage to the U. Income tax preparation software S. Income tax preparation software tax entered on line 32 to find the amount of U. Income tax preparation software S. Income tax preparation software tax allocated to USVI income ($4,539 x 0. Income tax preparation software 122 = $554), and enter that amount on line 35. Income tax preparation software Part IV. Income tax preparation software   Part IV is used to show payments of income tax to the USVI only. Income tax preparation software The Morenos had no tax withheld by the U. Income tax preparation software S. Income tax preparation software Virgin Islands, but made estimated tax payments to the USVI of $400, which they entered on lines 37 and 39. Income tax preparation software They include this amount ($400) in the total payments on Form 1040, line 72. Income tax preparation software On the dotted line next to the entry space for line 72, they enter “Form 8689” and show the amount. Income tax preparation software The Morenos do not complete Form 1116 because they receive credit on Form 1040, line 72, for the tax paid to the USVI. Income tax preparation software   The income tax they owe to the USVI ($154) is shown on Form 8689, line 44. Income tax preparation software They enter this amount on line 45. Income tax preparation software They also include this additional amount ($154) on the dotted line next to the entry space and in the total on Form 1040, line 72. Income tax preparation software The Morenos will pay their USVI tax at the same time they file the copy of their U. Income tax preparation software S. Income tax preparation software income tax return with the U. Income tax preparation software S. Income tax preparation software Virgin Islands. Income tax preparation software This image is too large to be displayed in the current screen. Income tax preparation software Please click the link to view the image. Income tax preparation software Form 4563, page 1 for John Black This image is too large to be displayed in the current screen. Income tax preparation software Please click the link to view the image. Income tax preparation software Form 5074, for Tracy Grey This image is too large to be displayed in the current screen. Income tax preparation software Please click the link to view the image. Income tax preparation software Form 8689, page 1 for Juan and Carla Moreno Prev  Up  Next   Home   More Online Publications
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Is My Residential Rental Income Taxable and/or Are My Expenses Deductible?

Note: This application does not address the rental income and expense of timeshares.

Information You Will Need:

  • Type of rental payment(s) received
  • Type of rental expense(s) paid
  • The number of days rented and the number of personal use days, if any

Estimated Completion Time:  15 minutes.  However: 5 minutes of inactivity will end the interview and you will be forced to start over.

Begin

Page Last Reviewed or Updated: 14-Feb-2014

The Income Tax Preparation Software

Income tax preparation software Index A Assistance (see Tax help) F Free tax services, How To Get Tax Help H Help (see Tax help) High-low method: Introduction, High-low method. Income tax preparation software October 1, 2010 (Table 1) (see List of states under October 1, 2010 (High-low method) ) Transition rules, High-low method. Income tax preparation software I Internet: Per diem rates, Per diem rates on the Internet. Income tax preparation software Introduction, Introduction M More information (see Tax help) O October 1, 2010 (High-low method): Arizona (AZ), Per Diem Rate Tables California (CA), Per Diem Rate Tables Colorado (CO), Per Diem Rate Tables District of Columbia (DC), Per Diem Rate Tables Florida (FL), Per Diem Rate Tables Illinois (IL), Per Diem Rate Tables Maryland (MD), Per Diem Rate Tables Massachusetts (MA), Per Diem Rate Tables New York (NY), Per Diem Rate Tables Pennsylvania (PA), Per Diem Rate Tables Rhode Island (RI), Per Diem Rate Tables Utah (UT), Per Diem Rate Tables Virginia (VA), Per Diem Rate Tables Washington (WA), Per Diem Rate Tables Wyoming (WY), Per Diem Rate Tables P Per diem rates: High-cost localities, High-low method. Income tax preparation software High-low method, High-low method. Income tax preparation software Internet, Per diem rates on the Internet. Income tax preparation software Regular federal method, Regular federal per diem rate method. Income tax preparation software Standard rate for unlisted localities, High-low method. Income tax preparation software , Regular federal per diem rate method. Income tax preparation software Transition rules, High-low method. Income tax preparation software , Federal per diem rate method. Income tax preparation software Publications (see Tax help) R Regular federal method: Introduction, Regular federal per diem rate method. Income tax preparation software Transition rules, Federal per diem rate method. Income tax preparation software T Table 2 (High-low method, October 1, 2010), Per Diem Rate Tables Tax help, How To Get Tax Help Taxpayer Advocate, Taxpayer Advocate Service. Income tax preparation software Transition rules:, Transition Rules Example: High-low method, High-low method. Income tax preparation software Regular federal method, Federal per diem rate method. Income tax preparation software High-low method, High-low method. Income tax preparation software Regular federal method, Federal per diem rate method. Income tax preparation software TTY/TDD information, How To Get Tax Help Prev  Up     Home   More Online Publications