Now we get to figure out how much tax is due (line 16). I know…exciting right!? Use the tax table in the instruction handbook to locate the line with the amount entered on line 15 on your 1040. Then navigate to the column based on how you are filing (single, married, etc.). Enter this amount on line 16.
If applicable, you may elect to report your child’s interest/dividend earnings, so they won’t have to file a return. If so, check the box and include Form 8814. Your child should receive a 1099-INT or 1099-OID. Use these to fill the form out.
Also, you must include any tax from Form 4972 that relates to lump-sum distributions as well as any other taxes owed such as recapture of an education credit (meaning you took the credit in a previous year, then got reimbursed, so now you must pay the taxes on the credit you received).
You can elect to have the IRS figure your taxes. Review chapter 13 of Pub 17 for details and to see if you qualify. They will either send you a refund or a bill.
If you owe any additional taxes such as alternative minimum tax (AMT) or excess advance premium tax credit (PTC) repayment, then fill out Part 1 of Schedule 2 and enter that amount on line 17. What is AMT you ask? Basically, it’s a tax for the rich folks out there. It’s like a second income tax system. No worries, I’m not that rich either.
PTC repayment is when your marketplace health insurance premium portion paid by the government was too much, and your monthly payment portion was too low, so now you must repay the government the difference. Hint, update your income when you renew your marketplace insurance plan and anytime you get a raise, and you shouldn’t have to make a repayment when you file your taxes. Thankfully we’ve reached line 18 and it’s just a simple addition problem – no forms needed!
Schedule your next tax appointment with Angie Love’s Taxes.
ANGIE LOVE’S TAXES
angielovestaxes.com