How to claim tax credit in “Other Payment” line of regular 1040 file in TurboTax?
(No Ratings Yet)
Loading ...
I received a DFAS 705 Form from the military because I was overpaid in the past and I repaid that debt last year in 2009. I talked with some tax lawyers and since the amount is over $3,000, I am legally allowed to claim the full amount as a credit against my tax liability. I am supposed to put the exact amount on the “Other Payment” line of the normal 1040 form with the explanation IRC 1341 in the notes next to it. The problem is, i’m using the free version of TurboTax and the software is not allowing me to put this credit down. I did not itemize and took the standard deduction so there are many less screens prompting me with instructions. I do not want to itemize because it is much better if I take the standard deduction. I do not need to use a 1040A in order to claim this credit, all I need to do is add it in the “Other Payment” line of the regular 1040 form. Can someone please let me know how I would do this in Turbotax. Can I just not efile after i’m done and then save and print off the .PDF file and add the credit under “Other Payment” in pen then? Then I guess I will have to recalculate all of the other figures and use whiteout or cross out the now wrong calculations? Or will I be able to include it in the regular TurboTax before they print my tax return? Thanks for any help anyone can provide.
July 28th, 2010 at 12:29 am
You follow the instructions in irs pub 525, page 36. http://www.irs.gov/pub/irs-pdf/p525.pdf
The credit is NOT the amount you paid back, but the amount of excess tax you paid in the year you ere overpaid. You have to analyze that earlier return to determine the amount of tax. This is “method 2″ in the publication. If you paid back, say, $5000, the credit will be less than $1250.
If method 2 results in less tax, claim the credit figured in (3) above on Form 1040, line 70, and enter “I.R.C. 1341” in the column to the right of line 70.
It appears Turbotax did not include a way for you to enter this via the step-by-step.
badassapps.org
Report this comment
July 28th, 2010 at 12:29 am
You follow the instructions in irs pub 525, page 36. http://www.irs.gov/pub/irs-pdf/p525.pdf
The credit is NOT the amount you paid back, but the amount of excess tax you paid in the year you ere overpaid. You have to analyze that earlier return to determine the amount of tax. This is “method 2″ in the publication. If you paid back, say, $5000, the credit will be less than $1250.
If method 2 results in less tax, claim the credit figured in (3) above on Form 1040, line 70, and enter “I.R.C. 1341” in the column to the right of line 70.
It appears Turbotax did not include a way for you to enter this via the step-by-step.
badassapps.org
Report this comment
July 28th, 2010 at 1:30 am
See IRS Pub 525 http://www.irs.gov/pub/irs-pdf/p525.pdf for how to report the repayment as a Claim of Right since it is over $3,000.
I don’t know if any of the tax software can handle this specialized tax issue. The free versions certain can not. You may be able to override the software calculations (Block’s Tax Cut, now Block at Home, does allow this more easily than TurboTax does) however those overrides will normally force you to file a paper return by mail.
badassapps.org
Report this comment
July 28th, 2010 at 2:29 am
confused go to H&R Block
badassapps.org
Report this comment