Line 23 refers to Schedule 2, which is a list of other possible taxes owed that are not listed directly on the 1040. Examples of other possible taxes are self-employment taxes, household employment taxes or if you received excess advance premium tax credit and need to repay it back. These taxes will be listed on this schedule along with their corresponding forms. The total from line 10 on Schedule 2 will go on onto line 23 of the 1040. Enter the total for lines 22 and 23 on line 24. This is your total tax. This is the amount of taxes that you owe.
To calculate how much tax you have already had withheld throughout the year, total the amounts from your W-2’s, 1099’s (if any taxes were deducted), and any other forms you have received showing income and taxes paid. The total amounts go on lines 25 and corresponding letter. Enter the total for 25a, b, and c on line 25d.
Enter any estimated tax payments you may have paid each quarter and any refund that was applied from your 2020 return on line 26. Estimated taxes are usually the taxes a business pays each quarter. Just so you know, our tax system is a pay-as-you earn system. You must pay in taxes throughout the year whether it’s as a W-2 employee or as business quarterly tax. If you don’t pay enough taxes in throughout the year you may get an additional fine. It’s a good idea to review your income and taxes due a few times a year so you can adjust accordingly.
If you have a qualifying child and are at least 18 years old, you may qualify to receive some Earned Income Credit. This is a credit given to those who earned income during the year and fall under certain income levels. Follow the steps on pages 38 – 41 to see what income qualifies for the EIC portion. Then, fill out Worksheet A and/or B on pages 44 and 45 in the instruction handbook. Then, you can locate the EIC tables on pages 47 to 56.
Just like your tax table locate the amount and the column of your filing status to figure the amount you can take. Enter this on 27a. If you are in the military and received combat pay, enter the amount on line 27b as this amount is nontaxable. That’s the least the government can do for our awesome military personnel! For 2021, you can elect to have your Earned Income Credit based on your 2019 income instead. This is due to the aftermath of Covid-19. Some taxpayers may not be making the amount of income they previously made which may allow them to have received a higher EIC amount. This was implemented for individuals and families still struggling to get back on their feet due to this pandemic.
As always, if you are unsure of any tax situation, be sure to contact your trusting tax professional for advisement or to process your tax return in an accurate and professional manner.
ANGIE LOVE’S TAXES
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