Mississippi Tax Form 80-108 Schedule A & B - Itemized Deduction, Interest & Dividends Instructions

Form 80-108

For the year 2008, a single form, Form 80-108, page 1, includes Schedule A - Itemized Deductions; Schedule B - Interest & Dividends; and Schedule N - Other Income (Loss) and Supplemental Income. Information for completing Schedules A and is transferred from Federal Form 1040 Schedules A. If you filed your Federal return using the standard deduction and wish to itemize deductions for Mississippi purposes, please use a Federal Form 1040 Schedule A as a worksheet and transfer the information from the specific lines indicated to the Mississippi Schedule A.

Schedule A - Itemized Deductions

Individual taxpayers may elect to either itemize their individual nonbusiness deductions or claim a standard deduction.

If your itemized personal deductions are greater than the standard deduction for your filing status (See instructions for Line 19), it will be to your advantage to complete and file Schedule A.

If the standard deduction for your filing status is greater than the amount of itemized deductions which you can substantiate, it is to your advantage to claim a standard deduction.

Lines 1a Through 1c - Medical and Dental Expenses

The instructions included with your federal return should be used in determining your medical deduction.

You should base your 7.5% limitation, Line 1b, on your federal adjusted gross income from your federal income tax return. Enter amounts Federal Form 1040, Schedule A. Subtract 7.5% Federal AGI on Line 1b.

Line 2a through 2c - Taxes You Paid

State income taxes paid or any other taxes allowed in lieu of Federal purposes including withholding taxes on Mississippi gaming winnings, are not deductible as an itemized deduction. These amounts should be subtracted on Line 2b. Also, you cannot deduct federal income tax or Social Security tax. Enter amounts from Federal Form 1040, Schedule A.

Line 3 - Interest You Paid

Federal income tax limitations with regard to interest expense apply fully to Mississippi income tax. Enter only interest expense deductible for federal income tax purposes. Enter amount from Federal Form 1040, Schedule A.

Lines 4 - Gifts to Charity

You can deduct what you gave to organizations that are religious, charitable, educational, scientific, or literary in purpose. The amounts you deduct are subject to the federal limitations. Enter amount from Federal Form 1040, Schedule A.

Line 5 - Casualty and Theft Losses

A casualty or theft loss is computed on the same basis and subject to the same limitations as under federal law. Use federal instructions included with your federal tax return to determine your loss. Federal Form 4684 must be attached.

For information about federal disaster area losses, including the election to claim a casualty loss deduction for the tax year(s) preceding the year of the casualty, net casualty loss carrybacks and carryovers, contact the Mississippi State Tax Commission. Enter amount from Federal Form 1040, Schedule A.

Lines 6a through 6c - Job Expenses and Most Other Miscellaneous Deductions

You may deduct certain miscellaneous expenses authorized by federal law and regulations such as educational expenses and employee expenses, but only to the extent that such expenses exceed the 2% federal adjusted gross income limit. Enter amounts from indicated lines on Federal Form 1040, Schedule A. Subtract 2% of Federal AGI on Line 6b.

Line 7a through 7c - Other Miscellaneous Deductions

Other miscellaneous expenses not subject to the 2% federal adjusted gross income limit are deductible on Line 7. Refer to federal instructions to determine type and amount. Enter amount from Federal Form 1040, Schedule A. Mississippi gaming losses are not deductible and should be subtracted on line 7b.

Line 8 - Mississippi Itemized Deductions

Add the total amounts for Lines 1 through 7 (1c, 2c, 3, 4, 5, 6c, and 7c).

Line 9 - Limitation on Mississippi Itemized Deductions

If the amount on line 36 of Form 1040 is more than $156,400 ($78,200 if married filing separately), do not use the amount shown on Line 8 above. You must use your Federal Schedule A to complete the Worksheet provided on the next page.

The amount determined on Line 8 of the worksheet should be entered here and on Form 80-108, Schedule A, Line 9.

Mississippi State Income Tax Adjustment Worksheet

Note: To complete this schedule you will need to refer to your Federal Itemized Deductions Worksheet in your Federal instructions.

Schedule B - Interest and Dividend Income

Use Schedule B to report interest income.

Interest Income

Report any interest you received or that was credited to your account so you could withdraw it. Examples are: interest on savings or other bank accounts; interest on a promissory note, a mortgage, or a corporate bond or debenture; interest on state obligations other than the State of Mississippi or subdivisions thereof, etc.

Interest income from obligations of the United States Government and the State of Mississippi and subdivisions thereof is exempt.

Line 1 - Interest income

Enter the amount of interest income reported on Federal Form 1040, Schedule B, Line 2.

Line 2 – Amount of MS Nontaxable Interest Reported on Line 1.

Enter the amount of interest received on obligations of the United State or the State of Mississippi or political subdivision. Do not include interest received on obligations of other countries, state, cities, or political subdivisions.

Line 3 – Total MS Interest

Line 1 minus line 2. Enter the total here and on Form 80-105, page 2, Line 40. On form 80-205, enter the amount on page 2, line 39.

Dividend Income

Report all dividend income received regardless of the amount. Include cash and the value of stock, property or merchandise you receive as a dividend. The payer should send you a Form 1099-DIV.

Dividends Include:

• Qualified dividends. See Form 1099-DIV, Box 1b.
• Ordinary dividends. See Form 1099-DIV, Box 1a.
• Nontaxable distributions. Some distributions are non-taxable because they are a return of your cost. They will not be taxed until you recover your cost. You must reduce your cost by these distributions. After you recover your cost, you must report these dividends as capital gains.
• Note: Capital gain distributions reported on Form 1099-DIV. If you have other capital gains or losses, enter your capital gain distributions on Federal Schedule D. If you don't need Federal Schedule D to report any other gains or losses, report capital gain distributions on Line 37, page 2 of your Mississippi income tax Form 80-105 (Line 36 of Form 80-205).

Line 4 - Total Dividend income

Enter the total amount of dividend income received.

Line 5 -Amount of Nontaxable Distributions Reported in Line 5

Enter the amount of distributions included in Line 5 above which would not be taxable for Mississippi purposes. (Example: interest on Federal obligations included with dividends reported)

Line 6 - Dividends for Mississippi

Subtract Line 6 from Line 5. Enter the result on Form 80-105, Page 2, Line 41. On Form 80-205, enter the total on Page 2, Line 40.