Other Income (Form 1040 Line 21)

Transcription

1 Other Income (Form 1040 Line 21) Common examples of Other Income: Jury duty pay Gambling winnings Prizes and awards Medical study subject pay 1099-LTC (Long Term Care income) Cancellation of Credit Card Debt Other Income does NOT generally include Non-employee compensation (Box 7) which is business income Sch C Does NOT include 1099-MISC rent or royalty income which are reported on Form 1040 line 17 Other Income includes income not reported on other lines and schedules Webster Training Tax Year

2 Other Income Form 1040 Line 21 Other Income From Form 1040 Line 21 Type or Amount fields link to 1040 Wkt7 Other Income Worksheet for 1040 Line 21 Webster Training Tax Year

3 Other Income Jury Duty Enter Jury Duty Pay amount and T/S/J on line 14 Webster Training Tax Year

4 Other Income Jury Duty 88 TaxWise will automatically enter Jury duty pay in Line 21 Type Box as well as the amount Webster Training Tax Year

5 Other Income Jury Duty Pay Given to Employer If any of the jury pay was turned over to the taxpayer s employer, enter this amount in the box on TWO Form 1040 above Line 36 This entry offsets total jury pay by the amount given to the employer Webster Training Tax Year

6 Other Income Gambling Winnings Gambling winnings are reported on Form W2-G Webster Training Tax Year

7 Other Income Gambling Winnings Click on the Form 1040 Line 21 type or amount to link to Other Income Worksheet for 1040 Line Link from Line 1 of Other Income Worksheet to Form W-2G If no W-2G, use line 16 (be sure to limit Sch A, line 28 gambling losses to no more than gambling winnings reported on 1040 line 21 Taxpayers must keep detailed records of their gambling sessions and winnings or losses Webster Training Tax Year

8 Other Income Gambling Winnings Complete the form and note that there is a field for entering gambling losses. Schedule A will automatically limit the losses to the amount won. Webster Training Tax Year

9 Other Income Gambling Winnings TaxWise will automatically enter Gambling Winnings in Line 21 Type Box as well as the amount, if Winnings entered on Form W2G Webster Training Tax Year

10 Other Income Prizes and Awards Box 3 typically includes prizes and awards that are not for services performed (i.e., recipient cannot be an employee) and not involving a wager Report this income on 1040 Line 21 Link from Line 21 to Other Income Worksheet for 1040 Line 21 Then link from line 2 of the Worksheet to 1099-MISC Webster Training Tax Year

11 Other Income Long Term Care Payments (1099-LTC) Per-diem basis or as reimbursement of actual expenses incurred Per-diem plan payments are not taxable up to $320 per day If per-diem payments received are less than $320 per day, none of the payments are taxable Webster Training Tax Year

12 Other Income Long Term Care Payments (1099-LTC) Accelerated Death Benefits Insured has been certified by a physician as terminally ill, then fully excludible Insured certified as chronically ill, then treated the same as paid under a qualified long-term care insurance contract If there are multiple payees under the insurance contract, refer the taxpayer to a paid preparer Entering in TWO Complete Form 8853 Pg 2 Either add or link from Wkt 7 TWO will carry taxable amount, if any, to 1040 Wkt 7 L 11 Unreimbursed medical expenses can be deducted on A Detail, if itemizing Webster Training Tax Year

13 Other Income Cancellation of Debt (1099-C) Nonbusiness credit card debt only Taxpayer must be solvent immediately before debt cancelled Value of assets exceeds value of liabilities Not in bankruptcy Otherwise out-of-scope Lenders must issue Form 1099-C if cancel $600 or more of debt Less than $600 must also be reported as income by taxpayer Cancelled debt included on Form 1040, Line 21 OOS Nonbusiness credit card debt only Webster Training Tax Year

14 Other Income Multiple Items Enter every item on Line 21 Other Income Worksheet The TaxWise Form 1040 will show only the first other income item but the printed form will say See Stmt The printed Form 1040 statement will show the individual items Webster Training Tax Year