Social Security Tax Withheld – Preparing Your 1040

One of the forms that U.S. tax payers fill out to file their annual tax return is 1040 form. The form is divided into different sections where you have to mention income and deductions. It will determine the tax you owe or refund you have to take. You might have to attach other forms based on type of the income you have.

On the first section of the page, you will have to enter information regarding sources of income such as salary, interest, dividends, alimony, capital gains, business income, income from agriculture, IRA contribution, pension, unemployment income, social security benefits, income from other sources etc. From the total income, you can make certain deductions to calculate AGI.

On second page of the form will include standard deductions as well as itemized deductions such as mortgage interest, excess medical expenses and others. The amount left after subtracting those exemptions from AGI is your taxable income.

Line 64 through Line 70 on the form 1040 include withholding, estimated tax, earned income tax credit, social security withholding, additional child tax credit and other.

Line 64 is for federal income tax withholding; it is from form W-2 and 1099. Box 2 on your W-2 statements and box 4 on 1099 statement reports how much tax is withheld from your income. You have to add this amount and report it in the line 64 of 1040. You also need to attach copy of W-2 form with the form. If your 1099 has any withholding, you have to attach that form too. Usually, 1099 form shows withholding if you are getting unemployment benefit, retirement income, social security benefits, interest, dividend etc.

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Line 65 is for estimated tax payments for the year 2016. If you have made any quarterly or periodic estimated tax payments during the year, add those amount or if you have to take any refund form previous year, report it.

Line 66 has two parts, 66a and 66b. On 66a, you have to report Earned income credit, EIC. If you have a qualifying child, attach schedule EIC with the form1040. 66b is for nontaxable combat pay election.

Line 67 is to claim Additional Child Tax Credit.

To claim the additional child tax, you have to fill out child tax credit worksheet. If it is less than your tax liability, your tax credit will be reduced. You will have to fill out additional child tax schedule 8812 and attach it.

Line 68 is to report net premium tax credit. You will have to attach form 8962 with the form 1040.

Line 69 is to report American opportunity credit which you will find on line 8 of form 8863. Attach form 8863 with the form 1040.

Line 70 is for amount paid with request for extension to file.

Line 71 reports excess social security and tier 1 RRTA tax withheld.

Line 72 is to report credit for federal tax on fuels. You will have to attach form 4136 which reports federal taxes paid on fuels you used for allowable non-taxable purposes. The payment is mentioned on line 10 of page 2.

Line 73 is to report credit from forms 2439, reserved and 8885 form.

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Form 2439 reports undistributed long-term capital gains to shareholders. You will find the amount in Box 2 of the form.

Form 8885 reports a tax credit for certain displaced workers who continue to pay health insurance after being laid-off. You will find the amount reported on line 8 of the form 8885.

Total of line 64 through 73 makes total payments.

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