You may claim the status Single if any of the following was true on December 31, 2016
Married Filing Jointly
- You were never married.
- You were legally separated, according to your state law, under a decree of divorce or separate maintenance.
- You were widowed before January 1, 2016, and did not remarry in 2016. But, if you have a dependent child, you may be able to use the qualifying widow(er) filing status.
You may claim the status Married Filing Jointly for Federal income tax purposes if the following is true:
- You were married as of December 31, 2016, even if you did not live with your spouse at the end of 2016.
- Your spouse died in 2016 and you did not remarry in 2016.
- Your spouse died in 2017 before filing a 2016 return.
A husband and wife may file a joint return even if only one have had income or if they did not live together all year. If you file a joint return, both you and your spouse are generally responsible for the tax and any interest or penalties due on the return. This means that if one spouse does not pay the tax due, the other may have to.
Married Filing Separately
If you are married and decide to file a separate tax return, you will usually pay more tax than if you use another filing status that you qualify for. Also, if you file a separate return, you cannot take the student loan interest deduction, the tuition and fees deduction, the education credits, or the earned income credit. You also cannot take the standard deduction if your spouse itemizes deductions.
Head of Household This filing status is for unmarried individuals who provide a home for certain other persons. (Some married persons who live apart may also qualify. See IRS instructions for Head of Household Filing Status. Generally, you may claim the Head of Household status if as of December 31, 2016, you were unmarried or legally separated (according to your state law).
Qualifying Widow(er) You may claim Qualified Widower if all five of the following apply:
- Your spouse died in 2014 or 2015 and you did not remarry in 2016
- You have a child, adopted child, stepchild, or foster child whom you claim as a dependent.
- This child lived in your home for all of 2016. Temporary absences, such as for school, vacation, or medical care, count as time lived in the home.
- You paid over half the cost of keeping up your home.
- You could have filed a joint return with your spouse the year he or she died, even if you did not actually do so.
For each exemption you can take, you can deduct $3,900 for 2016. You can claim an exemption for each of your dependents and/or spouse (if filing a joint tax return) who were alive during some part of 2016. This includes a baby born in 2016 or a person who died in 2016. If someone else can claim you as a dependent on his or her tax return you may not claim an exemption for yourself. If you were divorced or legally separated by December 31, 2016, you cannot claim an exemption for your former spouse. For more information refer to IRS Publication 501
You may be able to claim a child tax credit if you have a qualifying child. For 2016, the maximum amount of the credit is $1,000 for each qualifying child.A qualifying child is a child who:
- Is claimed as your dependent,
- Was under age 17 at the end of 2016,
- Is your son, daughter, adopted child, grandchild, stepchild, or eligible foster child, and
- Must be a U.S. citizen or resident
Enter the total of your estimated wages for the year. You cannot enter your wages as a negative number. If you contributed money into a retirement plan thru work (ex/ 401K plan), reduce those contributions from your gross wages. If you have a Net Operating Loss enter it into 'other income' (item #10). To estimate your wages for the year, divide your income to date by the number of month(s) that have passed this year and multiple that number by 12.Example: Income of $22,000 earned through June 30th divided by 6 months give you $3,667 per month. For the year your estimated wages should be $44,000 ($3,667 x 12 months)
Taxable interest includes interest from seller-financed mortgages, banks, savings and loan associations, money market certificates, credit unions, savings bonds, etc.
Non-stock dividends include any type of dividend you receive that is not based on ownership in corporate stock. Certain corporate stocks held less than 61 days may also qualify as a non-stock dividend. For further information refer to IRS Publication 550
Includes dividends you receive that are issued from a US or qualified foreign corporation. The tax rate for qualified dividends is either 0% or 15%, depending on your tax rate. If your tax rate is 25% or higher your qualified dividend rate will be 15%. If your tax rate is lower than 25% your dividend rate will be 0%. We will determine which rate to apply based on the information you enter. Certain corporate stocks held less than 61 days may not qualify as a qualified dividend. Dividends received from a municipal or state issued bond is not a qualified dividend. For further information refer to IRS Publication 550
Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. When you sell a capital asset, such as stocks, the difference between the amount you sell it for and your basis, which is usually what you paid for it, is a capital gain or a capital loss. While you must report all capital gains, you may deduct only your capital losses on investment or business property. You may never deduct a loss for personal property, i.e. you sell your car for a loss unless your car was used for a business purpose.
Enter the net amount of your short-term capital gains or losses for the year. These are your capital assets, stocks, bonds etc. that you did not hold for a year or more. We will calculate the capital gains tax and apply the $3,000 limitation to any short-term loss incurred.
A “paper loss” - a drop in an investment's value below its purchase price - does not qualify for long term or short term tax preference. The loss must be realized through the capital asset's sale or exchange.
Capital gains and losses are classified as long-term or short-term, depending on how long you hold the property before you sell it. If you hold a capital asset more than one year, your capital gain or loss is long-term. When you sell a capital asset, such as stocks, the difference between the amount you sell it for and your basis, which is usually what you paid for it, is a capital gain or a capital loss.
Enter the net amount of your long-term capital gains or losses for the year. These are your capital assets, stocks, bonds etc. that you held for a year or more. We will calculate the capital gains tax and apply the $3,000 limitation to any net long-term incurred.
A “paper loss” - a drop in an investment's value below its purchase price - does not qualify for long term or short term tax preference. The loss must be realized through the capital asset's sale or exchange.
Calculate your net income “income less expenses,” for your business activity and place that figure here. We will calculate both the self employment tax you would have to pay and the Federal income tax you are obligated for.
If you expect or have received a distribution from your IRA or pension account enter that information here. If your distribution is a premature distribution and you are subject or believe you are subject to a penalty for the premature distribution check the box “Premature distribution subject to penalty” and will calculate the penalty amount and add it to your estimated tax liability. For further information on IRA and pension distributions refer to IRS Publication 590B
Unemployment compensation generally includes any amounts received under the unemployment compensation laws of the United States or of a state. It includes state unemployment insurance benefits and benefits paid to you by a state or the District of Columbia from the Federal Unemployment Trust Fund. It also includes railroad unemployment compensation benefits, but not worker's compensation.
Enter here the amount of your Social Security benefits you expect to receive or have received for the entire year. If you are using this estimator after January 2016, you can generally secure your Social Security benefits from the following forms, Forms SSA-1099, SSA-1042S, RRB-1099 and RRB-1042S. Based on the other income you entered we will calculate the taxable portion of the Social Security benefits received.
Enter any other taxable income, gains or losses in this field.This can include such items as:
- Prizes and awards Gambling winnings (but not reduced by losses)
- Recovery of a bad debt
- Fees received for jury duty and precinct election board duty
- Net operating losses from prior years
- Bartering income
See IRS Publication 525
for more information on the list of taxable income items that may apply to you.
The Internal Revenue Code defines “clean-fuel” vehicles as motor vehicles designed to be propelled by one of the following fuels:
- Natural gas
- Liquified natural gas (LNG)
- Liquified petroleum gas (LPG)
- Electricity (e.g., some gasoline/electric hybrids)
- Any other fuel that is at least 85% alcohol or ether (e.g., E85)
The maximum deduction allowable for 2008 for the clean vehicle deduction is $1,500. The deduction is scheduled to drop to $1,000 for the 2005 tax year.
You and your spouse can take a deduction for contributions that you are allowed to make to your IRA, maximum $5,500 or $6,500 if you or your spouse is 50 and over. However, if at any time during the year you (or your spouse) are covered by a qualified retirement plan at work, your IRA deduction may be reduced or eliminated depending on your filing status and the amount of your income. Refer to IRS Publication 590
for additional information. We compute only the traditional IRA contributions. Roth IRA contributions are never deductible on your tax return.
You may deduct the alimony or separate maintenance payments you are required to make to your spouse or former spouse, or to a third party on behalf of that spouse. Alimony payments you make under a divorce or separation instrument, such as a divorce decree or a written agreement incident thereto, are deductible if all of the following requirements are met:
- You and your spouse or former spouse do not file a joint return with each other,
- You pay in cash (including checks or money orders),
- The divorce or separation instrument does not say that the payment is not alimony,
- If legally separated under a decree of divorce or separate maintenance, you and your former spouse are not members of the same household when you make the payment,
- You have no liability to make any payment (in cash or property) after the death of your spouse or former spouse; and
- Your payment is not treated as child support. Child support is never deductible.
You may be able to claim a tax credit of up to $1000 for each of your qualifying children under the age of 17. If you received an advanced payment of the child tax credit enter the amount of the advance here. We will subtract the amount of the credit due you from the advance credit you received.
Include here what you estimate your student loan interest will be for the year (If you using this estimator prior to receiving your interest statement from your college or other institution of higher learning)The maximum amount of student loan interest that is deducible for the year is $2,500. Your student loan interest deduction will phase out depending on your income (AGI) level. We will automatically compute your student loan interest deduction given your income and the amount of interest you paid. The student loan interest deduction is explained further in IRS Publication 970
Approximate your college fees and tuition expenses for the year. But, enter no more than $4,000 for the cost of your fees and tuition expense. The deduction is allowed for tuition and fees paid to attend an accredited college, university or vocational school. Persons who may be claimed as dependents, and married persons filing separately, may not take this deduction. This deduction is phased out depending on your income level. Enter your information and we will calculate the deduction (if you qualify) for you.Note: The deduction for college tuition and fees is not a substitute for either the Hope or Lifetime Learning Credits.
You can make contributions to a on a tax-deductible basis. Amounts held in the Health Savings Account, HSA, are invested and grow tax-free. You may make withdrawals from the HSA on a tax-free basis BUT you must use the withdrawals to pay for medical expenses that are not covered by insurance.Thus, an HSA could help you pay current medical expenses, as well as save for future medical expenses, on a tax-favored basis. The tax-advantaged features of the HSA could make it very useful to the person facing current and future medical expenses. The availability of an HSA is in addition to the Archer medical savings account (MSA), and is accessible to significantly more individuals than the Archer MSA. HOWEVER, to participate in a HSA you must be enrolled in a high deductible health plan. Generally, for individuals a high deductible health plan has an annual deductible of at least $1,250 and annual out of pocket expenses required to be paid (deductibles, co-payments and other amounts, but not premiums) not exceeding $6,250. For family coverage, a high deductible health plan has an annual deductible of at least $2,500 and annual out of pocket expenses required to be paid not exceeding $12,500.
If you have incurred or will incur moving expenses as a result of taking a job in a location more than 50 miles away from your home, enter the amount you paid here, reduced by any reimbursement you received from your employer. IRS Form 3903 lists the qualifications required to deduct your moving expenses. Refer to IRS Publication 521
for more information about the deductibility of your moving expenses.
We will automatically calculate your self-employment tax deduction based on the net income you enter for self-employment.
If you're self-employed and you pay premiums for health insurance coverage for yourself and your family, you're able to deduct a portion of those premiums on the face (front) of your Form 1040 rather than on Schedule A as an itemized deduction. This is an advantage because you are not limited to the amount that is over 10% of your adjusted gross income on the Schedule A (most people don't have enough expenses to deduct as a result).
For the current year you are allowed a deduction of 100 percent of the amount of premiums for health insurance. HOWEVER, if your net income from self-employment is a loss for the year, you cannot deduct your health insurance cost on the face of your federal tax return. You must itemize your health insurance cost on Schedule A, if your Schedule C reports a loss, for the year. For further information refer to IRS Publication 502
This field is automatically calculated based on the maximum SEP contribution for your Schedule C business income entered. If you desire to calculate a SEP contribution other than the maximum amount you may overwrite this field with an amount less than what we calculated.
Enter here the amount of Federal Income Taxes you expect to pay for the year. This can be taxes that were withheld from your W-2 wages, taxes paid on a quarterly basis or taxes subject to backup withholdings.
If you paid someone to care for a child or a dependent so you could work, you may be able to reduce your federal income tax by claiming the credit for child and dependent care expenses on your tax return. This credit is available to people who, in order to work or to look for work, have to pay for child care services for dependents under age 13. The credit is also available if you paid for care of a spouse or a dependent of any age that is physically or mentally incapable of self-care.
To claim the credit for child and dependent care expenses, you must meet the following conditions:
- You must have earned income from wages, salaries, tips or other taxable employee compensation, or net earnings from self-employment. If you are married, both you and your spouse must have earned income, unless one spouse was either a full-time student or was physically or mentally incapable of self-care.
- The payments for care cannot be paid to someone you can claim as your dependent on your return or to your child who is under age 19.
- Your filing status must be single, head of household, qualifying widow(er) with a dependent child, or married filing jointly.
- The care must have been provided for one or more qualifying persons identified on the form you use to claim the credit.
- You (and, if you're married, your spouse) must maintain a home that you live in with the qualifying child or dependent
You may enter the total number of dependents that you incurred child/dependent care expenses for. Current law limits the computation to $6,000 for two or more qualifying individuals if you paid $3,000 or more per child. These dollar limits must be reduced by the amount of any dependent care benefits provided by your employer that you exclude from your income.
The Hope credit is based on qualified education expenses you pay for yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. Generally, the credit is allowed for qualified education expenses paid for an academic period beginning in the current tax year or in the first 3 months of the new year.
Up to $2,500 credit per eligible student. Available ONLY until the first 4 years of post-secondary education are completed. Available ONLY for 2 years per eligible student. Student must be pursuing an undergraduate degree or other recognized education credential. Student must be enrolled at least half time for at least one academic period beginning during the year. No felony drug conviction on student's record.
Student-activity fees and expenses for course-related books, supplies, and equipment can be included in the expenses.Expenses That Do Not Qualify
Qualified education expenses do not include amounts paid for: Insurance, Medical expenses (including student health fees), Room and board, Transportation, or Similar personal, living, or family expenses. For more information refer to IRS Publication 970
, Tax Benefits for Education.
Current limit: up to $2,000 credit per return. Available for all years of postsecondary education and for courses to acquire or improve job skills. Available for an unlimited number of years. Student does not need to be pursuing a degree or other recognized education credential. Available for one or more courses. Felony drug conviction rule does not apply. For more information refer to IRS Publication 970
, Tax Benefits for Education.
Enter your medical and dental expenses incurred during the tax year for yourself, your spouse and your dependents for which you were not reimbursed. You may deduct what you paid for prescription medicines and drugs, dentist and medical doctors, ambulance services and travel costs to get medical care, health insurance premiums, X-ray and lab fees, nursing fees, hospital care, a program to stop smoking, etc. Unfortunately, cosmetic surgery that does not serve a medical purpose is not a deductible medical expense. Also, if you have shown a loss on your Schedule C you can enter your medical insurance premiums here. For further information on deductible medical expenses refer to IRS Publication 502
Enter the taxes you paid on real estate you own that was not used for business. Often, your mortgage payment includes amounts allocated to real estate taxes.For further information describing what types of taxes are deductible refer to IRS Publication 17
Generally, personal interest you incur is not deductible. HOWEVER, personal interest you incur on your real property (home) is deductible as well as the interest you incur on your investments. Points paid on the acquisition of a home or refinance of an existing home MAY qualify as a current interest deduction. For further information refer to IRS Publication 530
and IRS Publication 936
Enter here the amount of your charitable contributions for the entire year you're estimating. Only contributions actually made during the tax year are deductible. Charitable donations are limited to 50, 30 or 20 percent of your AGI. Most donations are 50 percent donations that find their way to our tax returns. Examples of 50 percent organizations include, religious, educational, scientific, non-profit hospitals and medical research facilities. The deduction limitation of 50% of adjusted gross income for charitable contributions is calculated automatically.
Examples of 30 percent organizations include, veterans' organizations, fraternal societies and nonprofit cemeteries. A 20 percent contribution consists of gifts of capital gain property. You will need to manually calculate the amount of charitable deduction for both 30 and 20 percent AGI contributions.
If you claim a deduction on your return of over $500 for all contributed property, you must attach an IRS Form 8283, to your return. If you donate a car to a charitable organization you will need to obtain and keep evidence of your car donation and be able to substantiate the fair market value of the car. If you are claiming a deduction of $250 or more for the car donation, you will also need a written acknowledgement from the charity that includes a description of the car and a statement of whether the charity provided any goods or services in return for the car and, if so, a description and estimate of the fair market value of the goods or services. Refer to IRS Publication 526
, for further information.
These include such items as tax preparation fees, legal fees that you incurred to produce or protect taxable income (such as fees to enforce or adjust the amount of alimony you're entitled to). Also included are employee business expenses, travel related expenses in conjunction with your employment, safe deposit box fees and other investment-related expenses. IRS Publication 529
provides detailed information on miscellaneous expenses that are deductible.
If you incurred a loss this year from a theft(s) or casualty, enter the amount of your deductible loss. To determine your deductible loss you must first reduce each casualty or theft by $500 per event, unless the property was used in a trade or business, and you must further reduce the total of your casualty and theft losses for the year on all personal property by 10% of your adjusted gross income. Example: You incur a theft of $5,000 and your AGI is $75,000. You would not be able to deduct any of the $5,000 on your tax return because the $500 per event deduction combined with 10% of your AGI exceeds the amount of your $5,000 theft. The best way to determine your deduction is to complete IRS Form 4684. For further information refer to IRS Publication 547
. Also include here your gambling losses to the extent of your gambling income.
Enter any estimated federal income tax payments you made for 2016. Include any overpayment from your 2015 return that you applied to your 2016 estimated tax.
If you and your spouse paid joint estimated tax but are now filing separate income tax returns, you can divide the amount paid in any way you choose as long as you both agree. If you cannot agree, you must divide the payments in proportion to each spouse's individual tax as shown on your separate returns for 2016. For an example of how to do this,see IRS Publication 505
. Be sure to show Social Security numbers (SSNs) in the space provided on the separate returns. If you or your spouse paid separate returns. If you or your spouse paid separate estimated tax but you are now filing a joint return, add the amounts you each paid. Follow these instructions even if your spouse died in 2016 or in 2017 before filing a 2016 return.
If your company has a 401(k) or other retirement plan benefit, then enter the amount you and your spouse have contributed through salary deductions to this plan. If you have made contributions to an IRA, enter those amounts on line 5 of step three.
Include on this line the state and local income taxes listed below:
- State and local income taxes withheld from your salary during 2016. Your Form(s) W-2 will show these amounts. Forms W-2G, 1099-G, 1099-R, and 1099-MISC may also show state and local income taxes withheld.
- State and local income taxes you paid in 2016 for a prior year, such as taxes paid with your 2015 state or local income tax return. Do not include penalties or interest.
- State and local estimated tax payments you made during 2016, including any part of a prior year refund that you chose to have credited to your 2016 state or local income taxes.
- Mandatory contributions you made to the California, New Jersey, or New York Nonoccupational Disability Benefit Fund, Rhode Island Temporary Disability Benefit Fund, or Washington State Supplemental Workmen's Compensation Fund.
- Mandatory contributions you made to the Alaska, New Jersey, or Pennsylvania state unemployment fund.
Do not reduce your deduction by any:
- State or local income tax refund or credit you expect to receive for 2016, or
- Refund of, or credit for, prior year state and local income taxes you actually received in 2016.
The Homebuyer Credit is available to either first-time homebuyers or homebuyers that are long-term residents. For tax year 2016, the credit is ONLY for persons that where on “Qualified Official Extended Duty”. You must of also of purchased on or after January 1, 2016, and close before July 1, 2016. However, you must have had a binding contract before May 1, 2016.
A First-time Homebuyer means you (and your spouse if married) did not own a home within three years prior of purchasing your home. The credit is either the smaller of $8,000 or 10% of the purchase price of the home.
A Long-Term Resident means the buyer must have owned and used the same home as a principal or primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of a new home as a primary residence. The credit is either the smaller of $6,500 or 10% of the purchase price of the home.
“Qualified Official Extended Duty Service” means service on official extended duty as a member of the uniformed services, member of the Foreign Service of the U.S., or an employee of the intelligence community. The extended duty is any period where taxpayer or spouse is 50 miles or more away from principal residence. The duty must be more than 90 days or for an indefinite period.
The following are other restrictions on purchases that apply to the credit:
- Do not include purchases from related persons when determining the credit
- Dependents are not eligible to claim the credit
- credit is available if the purchase price of a home is more than $800,000
- The homebuyer must be at least 18 years old on date of purchase
- The homebuyer must not dispose of the home before the close of the tax year (Dec 31, 2016).
If you received a First Time Homebuyer Credit on your 2008 tax return, you should have started already repaying this starting on your 2010 tax year return. You are to repay the credit over 15 years. Calculate the amount of repayment by dividing the credit taken in 2008 by '15'.
Qualified expenses for an Education Credit are tuition and fees required for enrollment of attendance at an eligible educational institution, including courses to acquire or improve job skills. Eligible institutions include most accredited post-secondary schools in the U.S. and some schools outside the U.S that are eligible to participate in the U.S. Department of Education Federal Student Aid program. You can go to http://www.fafsa.ed.gov/index.htm to see if your school participates.Eligible students could be the taxpayer, spouse, or dependent claimed on tax return. You can claim credit for expenses you paid and for expenses paid by your dependent student, including direct payments to the school by grandparents or other third parties that are treated as paid by the student. (See IRS Publication 970
for more information)
Phase out of credit is between $160,000 and $180,000 for a married filing joint couple; between $80,000 and $90,000 for all other filing statuses.
Personal property taxes can include automobile license fees to the extent that the fees are based on a percentage of the vehicle's value and are assessed on an annual basis.For further information describing what types of taxes are deductible refer to IRS Publication 17