Line 77 -
Estimated tax penalty (see instructions)
You may owe this penalty if:
1) Line 76
is at least $1,000 and it is more than 10% of the tax shown on your return, or
2) You did not pay enough estimated tax by any of the due dates.
This is true even if you are due a refund. For most people, the “tax shown on
your return” is the amount on your 2011 Form1040, line 61, minus the total of
any amounts shown on lines 64a, 65, 66, 67, and 70 and Forms 8828, 4137, 5329
(Parts III through VIII only), 8801 (line 27 only), 8839, 8885, and 8919. Also
subtract from line 61 any tax on an excess parachute payment, any excise tax on
insider stock compensation of an expatriated corporation, any uncollected
social security and Medicare or RRTA tax on tips or group-term life insurance,
any look-back interest due under section 167(g) or 460(b), and any write-in tax
included on line 60 from Form 8885. When figuring the amount on line 61, include
household employment taxes only if line 62 is more than zero or you would owe the
penalty even if you did not include those taxes.
Exception
You will not owe the penalty if your
2010 tax return was for a tax year of 12 full months and either of the
following applies.
1) You had no tax shown on your 2010 return and you were a U.S.
citizen or resident for all of 2010.
2) The total of lines 62, 63, and 69 on your 2011 return is at
least 100% of the tax shown on your 2010 return (110% of that amount if you are
not a farmer or fisher-man, and your adjusted gross income(AGI) shown on your
2010 return was more than $150,000 (more than $75,000 if married filing
separately for 2011)). Your estimated tax payments for 2011 must have been made
on time and for the required amount.
For most people, the “tax shown on
your 2010 return” is the amount on your 2010Form 1040, line 60, minus the total
of any amounts shown on lines 63, 64a, 65, 66, and 67 and Forms 8828, 4137,
4136, 5329 (Parts III through VIII only), 8801 (line 27 only), 8885, and 8919.
Also subtract from line 60 any tax on an excess parachute payment, any excise
tax on insider stock compensation of an expatriated corporation, any uncollected
social security and Medicare or RRTA tax on tips or group-term life insurance,
any look-back interest due under section 167(g) or 460(b), and any write-in tax
included on line 60 from Form 8885.
When figuring the amount on line 60,
include household employment taxes only if line 61 is more than zero or you
would have owed the estimated tax penalty for 2010 even if you did not include
those taxes. But if you entered an amount on your 2010 Schedule H, line 7,
include the total of that amount plus the household employment taxes on your
2010 Form 1040, line 59.
Figuring
the Penalty
If the Exception just described does
not apply and you choose to figure the penalty yourself, use Form 2210 (or
2210-F for farmers and fishermen). Enter any penalty on line 77. Add the penalty
to any tax due and enter the total on line 76.
However, if you have an overpayment on
line 73, subtract the penalty from the amount you would otherwise enter on line
74a or line 75. Lines 74a, 75, and 77 must equal line 73.
If the penalty is more than the
overpayment on line 73, enter -0- on lines 74a and 75. Then subtract line 73
from line 77 and enter the result on line 76.
Do not file Form 2210 with your return
unless Form 2210 indicates that you must do so. Instead, keep it for your
records.
TIP
Because Form 2210 is complicated, you
can leave line 77 blank and the IRS will figure the penalty and send you a
bill. We will not charge you interest on the penalty if you pay by the date
specified on the bill. If your income varied during the year, the annualized
income installment method may reduce the amount of your penalty.
But you must file Form 2210 because
the IRS cannot figure your penalty under this method. See the Instructions for
Form 2210 for other situations in which you may be able to lower your penalty
by filing Form 2210.
Third
Party Designee
If you want to allow your preparer, a friend, a family member, or
any other person you choose to discuss your 2011 tax return with the IRS, check
the “Yes” box in the “Third Party Designee” area of your return. Also, enter
the designee’s name, phone number, and any five digits the designee chooses as his
or her personal identification number (PIN).
If you check the “Yes” box, you, and your
spouse if filing a joint return, are authorizing the IRS to call the designee
to answer any questions that may arise during the processing of your return.
You are also authorizing the designee to:
1) Give the
IRS any information that is missing from your return,
2) Call the IRS for information about the processing of your
return or the status of your refund or payment(s),
3) Receive
copies of notices or transcripts related to your return, upon request, and
4) Respond to certain IRS notices about math errors, offsets, and
return preparation. You are not authorizing the designee to receive any refund
check, bind you to anything (including any additional tax liability), or otherwise
represent you before the IRS. If you want to expand the designee’s
authorization, see Pub. 947.
The authorization will automatically end
no later than the due date (without regard to extensions) for filing your 2012
tax return. This is April 15, 2013, for most people. If you wish to revoke the
authorization before it ends, see Pub. 947.
Sign Here
Form 1040 is not considered a valid
return unless you sign it. If you are filing a joint return, your spouse must
also sign. If your spouse cannot sign the return, see Pub. 501. Be sure to date
your return and enter your occupation(s). If you have someone prepare your return,
you are still responsible for the correctness of the return. If your return is
signed by a representative for you, you must have a power of attorney attached that
specifically authorizes the representative to sign your return. To do this, you
can use Form 2848. If you are filing a joint return as a surviving spouse, see
Death of a Taxpayer, later.
Child’s
Return
If your child cannot sign the return,
either parent can sign the child’s name in the space provided. Then, enter “By
(your signature), parent for minor child.”
Daytime
Phone Number
Providing your daytime phone number
may help speed the processing of your return. We may have questions about items
on your return, such as the earned income credit, credit for child and
dependent care expenses, etc. If you answer our questions over the phone, we
may be able to continue processing your return without mailing you a letter. If
you are filing a joint return, you can enter either your or your spouse’s day- time
phone number.
Electronic
Return Signatures!
To file your return electronically,
you must sign the return electronically using a personal identification number
(PIN). If you are filing online using software, you must use a Self-Select PIN.
If you are filing electronically using a tax practitioner, you can use a
Self-Select PIN or a Practitioner PIN.
Self-Select
PIN
The Self-Select PIN method allows you
to create your own PIN. If you are married filing jointly, you and your spouse
will each need to create a PIN and enter these PINs as your electronic
signatures. A PIN is any combination of five digits you choose except five
zeros. If you use a PIN, there is nothing to sign and nothing to mail—not even
your Forms W-2.
To verify your identity, you will be prompted
to enter your adjusted gross in- come (AGI) from your originally filed 2010
federal income tax return, if applicable. Do not use your AGI from an amended return
(Form 1040X) or a math error correction made by IRS. AGI is the amount shown on
your 2010 Form 1040, line 38; Form 1040A, line 22; or Form 1040EZ, line 4. If you
do not have your 2010 income tax return, call the IRS at 1-800-908-9946 to get
a free transcript of your return or visit IRS.gov and click on “Order a Tax
Return or Account Transcript.” (If you filed electronically last year, you may
use your prior year PIN to verify your identity instead of your prior year AGI.
The prior year PIN is the five digit PIN you used to electronically sign your
2010 return.) You will also be prompted to enter your date of birth (DOB).
CAUTION
You cannot use the Self-Select PIN
method if you are a first-time filer under age 16 at the end of 2011.
TIP
If you cannot locate your prior year
AGI or prior year PIN, use the Electronic Filing PIN Request. This can be found
at IRS.gov. Click on “Tools” and then “Electronic Filing PIN Request.” Or you
can call 1-866-704-7388.
Practitioner
PIN
The Practitioner PIN method
allows you to authorize your tax practitioner to enter or generate your
PIN.
The practitioner can provide you with details.
Form 8453
You must send in a paper Form 8453 if you have to attach certain forms
or other documents that cannot be electronically filed. For details, see
Form8453.
Identity
Protection PIN
If the IRS gave you an identity
protection personal identification number (PIN) because you were a victim of
identity theft, enter it in the spaces provided below your daytime phone
number. If the IRS has not given you this type of number, leave these spaces
blank.
Paid
Preparer Use Only
Generally, anyone you pay to prepare your return must sign it and
include their Preparer Tax Identification Number (PTIN) in the space provided.
The preparer must give you a copy of the return for your records. Someone who
prepares your return but does not charge you should not sign your return.
Assemble
Your Return
Assemble any schedules and forms
behind Form 1040 in order of the “Attachment Sequence No.” shown in the upper
right corner of the schedule or form. If you have supporting statements,
arrange them in the same order as the schedules or forms they support and attach
them last. Do not attach correspondence or other items unless required to do
so. Attach a copy of Forms W-2 and 2439 to the front of Form 1040. If you
received a Form W-2c (a corrected Form W-2), attach a copy of your original
Forms W-2 and any Forms W-2c. Also attach
Forms W-2G and 1099-R to the front of Form 1040 if tax was withheld.
This concludes our series on the 2011 Form 1040 Exclusive.
Upcoming series: Important tax topics
Thanks for reading my blogs.
