Saturday, December 24, 2011

Topic #14– 2011 Form 1040 Exclusive – Tax and Credits, Part II


Line 46

Add lines 44 and 45.

This is your total tax for the year.



Line 47 – Foreign tax credit. Attach Form 1116 if required

If you paid income tax to a foreign country, you may be able to take this credit. Generally, you must complete and attach Form 1116 to do so.

Exception

You do not have to complete Form 1116 to take this credit if all of the following apply.

1) All of your foreign source gross income was from interest and dividends and all of that income and the foreign tax paid on it were reported to you on Form 1099-INT, Form 1099-DIV, or Schedule K-1 (or substitute statement).
2) The total of your foreign taxes was not more than $300 (not more than $600 if married filing jointly).
3) You held the stock or bonds on which the dividends or interest were paid for at least 16 days and were not obligated to pay these amounts to someone else.
4) You are not filing Form 4563 or excluding income from sources within Puerto Rico.
5) All of your foreign taxes were:
a. Legally owed and not eligible for a refund or reduced tax rate under a tax treaty, and
b. Paid to countries that are recognized by the United States and do not support terrorism.

For more details on these requirements, see the Instructions for Form 1116.

Do you meet all five requirements above?

 Yes

Enter on line 47 the smaller of (a) your total foreign taxes, or (b) the amount on Form 1040, line 44.

No

See Form 1116 to find out if you can take the credit and, if you can, if you have to file Form 1116.



Line 48 – Credit for child and dependent care expenses. Attach Form 2441

You may be able to take this credit if you paid someone to care for:

1) Your qualifying child under age 13 whom you claim as your dependent,
2) Your disabled spouse or any other disabled person who could not care for himself or herself, or
3) Your child whom you could not claim as a dependent because of the rules for Children of divorced or separated parents in the instructions for line 6c.

For details, use Tele Tax topic 602 or see Form 2441.



Line 49 – Education credits from Form 8863, line 23

If you (or your dependent) paid qualified expenses in 2011 for yourself, your spouse, or your dependent to enroll in or attend an eligible educational institution, you may be able to take an education credit. See Form 8863 for details. However, you cannot take an education credit if any of the following applies.

1) You, or your spouse if filing jointly, are claimed as a dependent on someone else’s (such as your parent’s) 2011 tax return.
2) Your filing status is married filing separately.
3) The amount on Form 1040, line 38, is $90,000 or more ($180,000 or more if married filing jointly).
4) You are taking a deduction for tuition and fees on Form 1040, line 34, for the same student.
5) You, or your spouse, were a nonresident alien for any part of 2011 unless your filing status is married filing jointly.



Line 50 – Retirement savings contributions credit. Attach Form 8880

You may be able to take this credit if you, or your spouse if filing jointly, made (a) contributions, other than rollover contributions, to a traditional or Roth IRA; (b) elective deferrals to a 401(k) or 403(b) plan
(including designated Roth contributions) or to a governmental 457, SEP, or SIMPLE plan; (c) voluntary employee contributions to a qualified retirement plan (including the federal Thrift Savings Plan); or (d) contributions to a 501(c)(18)(D) plan. However, you cannot take the credit if either of the following applies.

1) The amount on Form 1040, line 38, is more than $28,250 ($42,375 if head of household; $56,500 if married filing jointly).
2) The person(s) who made the qualified contribution or elective deferral (a) was born after January 1, 1994, (b) is claimed as a dependent on someone else’s 2011 tax return, or (c) was a student (defined next). You were a student if during any part of 5 calendar months of 2011 you:
• Were enrolled as a full-time student at a school, or
• Took a full-time, on-farm training course given by a school or a state, county, or local government agency. A school includes a technical, trade, or mechanical school. It does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet.

For more details, use Tele Tax topic 610or see Form 8880.



Line 51 – Child tax credit (see instructions)

Three Steps To Take the Child Tax Credit

Step 1

Make sure you have a qualifying child for the child tax credit. Follow Steps 1 through 3 in the instructions for line 6c. If you do not have a qualifying child, you cannot claim the child tax credit.

Step 2

Make sure you checked the box on Form 1040, line 6c, column (4), for each qualifying child.

Step 3

Answer the questions below to see if you can use the Child Tax Credit Worksheet to figure your credit or if you must use Pub. 972.

Use the 2011 Form 1040 Instructions to figure out your child tax credit.



Line 52 – Residential energy credits. Attach Form 5695

Nonbusiness energy property credit

You may be able to take this credit by completing and attaching Form 5695 for any of the following improvements to your main home located in the United States in 2011 if they are new and meet certain requirements for energy efficiency.

• Any insulation material or system primarily designed to reduce heat gain or loss in your home.
• Exterior windows (including skylights).
• Exterior doors.
• A metal roof or asphalt roof with pigmented coatings or cooling granules primarily designed to reduce the heat gain in your home.

You may also be able to take this credit for the cost of the following items if the items meet certain performance and quality standards.

• Certain electric heat pump water heaters, electric heat pumps, central air conditioners, and natural gas, propane, or oil water heaters.
• A qualified furnace or hot water boiler that uses natural gas, propane, or oil.
• A stove that burns biomass fuel to heat your home or to heat water for use in your home.
• An advanced main air circulating fan used in a natural gas, propane, or oil furnace.

Residential energy efficient property credit

You may be able to take this credit by completing and attaching Form 5695 if you paid for any of the following during 2011.

• Qualified solar electric property for use in your home located in the United States.
• Qualified solar water heating property for use in your home located in the United States.
• Qualified fuel cell property installed located in the United States. on or in connection with your main home
• Qualified small wind energy property for use in connection with your home located in the United States.
• Qualified geothermal heat pump property installed on or in connection with your home located in the United States.

Condos and co-ops

If you are a member of a condominium management association for a condominium you own or a
tenant-stockholder in a cooperative housing corporation, you are treated as having paid your proportionate share of any costs of such association or corporation for purposes of these credits.

More details

For details, see Form 5695.



Line 53 – Other credits from Form: a. 3800; b. 8801; c.

Enter the total of the following credits on line 53 and check the appropriate box(es). Check all boxes that apply. If box c is checked, also enter the applicable form number. To find out if you can take the credit, see the form or publication indicated.

• General business credit. This credit consists of a number of credits that usually apply only to individuals who are partners, shareholders in an S corporation, self-employed, or who have rental property. See Form 3800 or Pub. 334.
• Credit for prior year minimum tax. If you paid alternative minimum tax in a prior year, see Form 8801.
• Mortgage interest credit. If a state or local government gave you a mortgage credit certificate, see Form 8396.
• Credit for the elderly or the disabled. See Schedule R.
• District of Columbia first-time homebuyer credit. See Form 8859.
• Qualified plug-in electric drive motor vehicle credit. See Form 8936.
• Qualified plug-in electric vehicle credit. See Form 8834, Part I.
• Qualified electric vehicle credit. You cannot claim this credit for a vehicle placed in service after 2006. You can claim this credit only if you have an electric vehicle passive activity credit carried forward from a prior year. See Form 8834, Part II.
• Alternative motor vehicle credit. See Form 8910 if you placed a new fuel cell motor vehicle in service during 2011 or converted a motor vehicle to a qualified plug-in electric drive motor vehicle in 2011.
• Alternative fuel vehicle refueling property credit. See Form 8911.
• Credit to holders of tax credit bonds. See Form 8912.

Line 54

Add lines 47 through 53. These are your total credits

Line 55

Subtract line 54 from line 46. If line 54 is more than line 46, enter 0.

This concludes the section of Tax and Credits of the 2011 Form 1040.

Up next: Other Taxes

No comments:

Post a Comment