The Salina Journal Thursday, January 16,1986 PageTZ Double-check trouble areas to avoid delays Each year there are some predictable trouble spots with federal income tax forms, according to the Internal Revenue Service. These are areas where large numbers of taxpayers make incorrect entries and thereby slow the processing of tax forms. These trouble spots fall into two broad categories: problems that recur each year, such as taxpayers selecting the incorrect figure from the tax tables, and problems that stem from changes in the tax laws and forms from one year to the next, such as the addition of a new line to a form or the shift of an existing line to a new position on the form. Not surprisingly, the largest percentage of errors is made on Form 1040, the so-called long form. To assist filers of this form, the IRS has compiled the following list of problem areas to doublecheck: • 1. Medical deductions. This item is not entered on Form 1040, but on a related Schedule A. Because Schedule A was redesigned last year, this item will probably be one of the leaders on the list of last year's most common errors. Due to rule changes on medical deductions, IRS expects problems again this year. Be sure to check the limitation on medical expenses. • 2. Figure from tax table. Because of the number of pages and figures involved, this item is always high on the list of most common errors for all tax forms. Double check the figure from the tax table for your filing status and enter on line 38. Check the box for Tax Table. • 3. Unemployment compensation. Double-check your figures on the worksheet in the tax instruction booklet (page 10), and make appropriate entries on lines 20a and 20b. • 4. Child care credit. Read instructions carefully and double- check your computations on Form 2441, Credit for Child and Disabled Dependent Care Expenses. Enter the figure on line 41 and attach Form 2441 to your return. • 5. Balance due/refund. This important item usually makes the list of most common errors. If your total tax (line 56) is larger than your total payments made (line 64), enter the difference on line 68, Amount You Owe. Follow the instructions for remitting payment. If the reverse is true, enter the difference on line 65, Overpaid. Enter on line 66, Refunded to You, the portion of the line 65 overpayment that you want refunded to you. • 6. Earned income credit (EIC) Not Claimed. If you are a working parent and have at least one child living with you, and if your adjusted gross income (line 32) is less than $11,000, you probably qualify. See page 16 of the instructions. • 7. EIC error or not qualified. Make sure you are qualified. Cer- tain expectations must be met, and you must have a dependent child living with you and you must have worked during the year. Follow the instruction carefully and enter on line 59. • 8. Dividends. You must complete and attach Schedule B if you have over $400 in dividend income. Enter your total dividends on line 9a; your exclusion (up to $100 for individual filers, up to $200 for married filing jointly) on line 9b; and enter the difference (subtract line 9b from 9a) on line 9c. • 9. Income computation. This is an outgrowth of item 8, since the taxpayers who miscompute their dividend income will have an error on line 23, total income. Double- check these figures. • 10. Income averaging. Schedule G, Income Averaging, is one of the most difficult forms for in- dividual filers, because of the number of tax years covered. You should have copies of your returns for the preceding three years in order to accurately complete this form. Read and follow instructions carefully and double-check all figures. Who Must File — 1985 Start here Were you a U.S. citizen or resident lor the entire year? No Get Pub. 519. Follow the arrows to find out whether you must file a federal income tax return. By answering "Yes" or "No" to each question in turn and following the arrow to the next box, you will be led to "File a return by'the due date" or "You do not have to file a return." Yes I Did you have gross income of $1.040 or more 9 No Yes I Did you exclude income from within a U.S. possession? Yes Was your gross income less than $3,430 ($4,470 if 65 or older)? If you are a surviving spouse with a dependent child, was it less than S4.580 ($5,620 if 65 or older)' Yes No No I Were you married at the end of the year? No Yes I Did you and your spouse have the same household at the end of the year 9 No Yes I Can someone else take you" as a dependent 9 No Are you filing a separate return 9 I Did you have $1.040 or more of jnearned income? Yes Yes Can someone else take you as a dependent? No I Yes Did you have $1.040 or more of unearned income during (he year? File a return by the due date. No I / Was your and your spouse's I combined gross income I S5.620 or more ($6.660 if one V is 65 or older; $7.700 it both \ are 65 or older) 9 Yes I No Did you have net self-employment income of $400 or more or wages of $100 or more from a church or qualified church- controlled organization exempt from social security taxes? No Do you owe social security tax on tips you did not report to your employer; uncollected social security tax on tips reported to your employer; alternative minimum tax; tax on an IRA; or tax from refiguring an investment credit? No Was any income tax withheld from your pay? No If eligible, do you want to take the earned income credit, or did you get advance payments of the earned income credit? (See Chapter 37.) I No You do not have to file a return. No 'File a return by the due date. 2 You are filing for a refund of tax.
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