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21 Cards in this Set
- Front
- Back
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Where is taxable interest income reported on the tax return?
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Forms 1040 or 1040A, line 8a or Form 1040EZ, line 2
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At what amount must interest income be reported on Form 1040, Schedule B?
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over $1,500 .
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What other situations require the completion of Schedule B?
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If the taxpayer received a Form 1099-INT for interest that actually belongs to someone else or if the taxpayer received any amount of seller-financed mortgage interest
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Where is a penalty on early withdrawal of savings reported on Form 1099-INT?
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Box 2
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Is interest received on U.S. Treasury Obligations taxable on state and/or local returns?
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No
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A taxpayer received $1,800 taxable interest and $200 municipal bond interest. He received a 1099-INT for the municipal bond interest. How do you report the interest received?
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Enter the $1,800 first on Schedule B and then on 1040, line 8a. Report the $200 directly on the 1040, line 8b
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What four types Interest Income must be listed on Sched B, even if total taxable interest income is 1,500 or less?
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-Interest on Foreign investment.
-Interest on Seller-Financed Mortgage. -Interest not properly attributable to the taxpayer(Nominee interest). -Interest from U.S Savings bonds which is being excluded from income. (Series EE and I bonds used for qualified higher education expenses) |
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A taxpayer receives a Form 1099-DIV showing $200 of ordinary dividends in box 1a and $100 in box 1B. Where is the box 1a amount entered on the tax return?
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1040 or 1040A, line 9a
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What about the amount in box 1b in form 1099-DIV?
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Qualified dividends in box 1b, which are included in box 1a, are entered on Form 1040 or 1040A, line 9b
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Where are nontaxable distributions, shown in box 3 of Form 1099-DIV, reported
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Generally, nontaxable distributions are not reported on the tax return.
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How do qualified dividends differ from ordinary dividends?
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Qualified dividends are received on most shares of common stock held for more than 60 days (or preferred stock held for more than 90 days) and are taxed as long-term capital gains
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Suppose that the taxpayer’s Form 1099-DIV also showed $80 capital gain distribution in box 2a. Where is this amount entered on the tax return?
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On Form 1040, line 13 or Form 1040A, line 10
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What types of taxpayers will require the Qualified Dividends and Capital Gain Tax Worksheet – Line 44?
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Taxpayers who receive Form 1099-DIV showing they received qualified dividends must use the Qualified Dividends and Capital Gains Tax Worksheet – Line 44. Also, those taxpayers who have capital gain distributions shown in box 2a of Form 1099-DIV will use the worksheet
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If an Oregon nonresident taxpayer has a savings account in an Oregon bank, is it taxable on the Oregon return?
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No
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If an Oregon part-year resident has a savings account in an Oregon bank, is it taxable on the Oregon return?
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Only the portion while the taxpayer is an Oregon resident
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Does Oregon tax Oregon bond interest?
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No
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Does Oregon tax other states’ bond interest?
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Yes
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How is other states’ bond interest treated on the Oregon return?
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As an addition to income.
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When an Oregon resident has U.S. Bond interest, taxable on the federal return, what should be done on the Oregon return?
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The interest would be an Oregon subtraction.
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In what section of the 1040 is the penalty on early withdrawal of savings reported?
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The Adjusted Gross Income section as an adjustment to income on Line 30
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What is the benefit to the taxpayers who use the Qualified Dividends and Capital Gain Tax Worksheet – Line 44?
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The qualified dividends and/or capital gains will receive a more favorable tax treatment. They are taxed at either 0% long term capital gains tax rate (10% or 15% tax bracket) or 15% long term capital gains tax rate (25% tax bracket) instead of ordinary income tax rate
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