Tax Preparation Help  
Form 1040 Instructions 2005 2005 Tax Year

Amount You Owe

Amount You Owe

IRS e-file offers an additional payment option:

Electronic funds withdrawal. This option allows you to file your return early and schedule your payment for withdrawal from your checking or savings account on future date up to and including April 17, 2006. IRS e-file also provides proof of receipt of your return and payment by email or through your software package. Visit www.irs.gov/efile for details.

Line 75 - Amount You Owe

Tip!

Pay your taxes in full by April 17, 2006, to save interest and penalties. You do not have to pay if Line 75 is under $1.

Include any estimated tax penalty from Line 76 in the amount you enter on Line 75. You can pay by check, money order, or credit card. Do not include any estimated tax payment for 2006 in your check, money order, or amount you charge. Instead, make the estimated tax payment separately.

To pay by check or money order. Make your check or money order payable to the “United States Treasury’ for the full amount due. Do not send cash. Do not attach the payment to your return. Write “2005 Form 1040’ and your name, address, daytime phone number, and social security number (SSN) on your payment. If you are filing a joint return, enter the SSN shown first on your tax return.

To help process your payment, enter the amount on the right side of the check like this: $ XXX.XX. Do not use dashes or lines (for example, do not enter “$ XXX–’ or “$ XXX xx/100’).

Then, please complete Form 1040-V following the instructions on that form and enclose it in the envelope with your tax return and payment. Although you do not have to use Form 1040-V, doing so allows us to process your payment more accurately and efficiently.

To pay by credit card. You may use your American Express. Card, Discover. Card, MasterCard. card, or Visa. card. To pay by credit card, call toll free or visit the website of either service provider listed on this page and follow the instructions. A convenience fee will be charged by the service provider based on the amount you are paying. Fees may vary between the providers. You will be told what the fee is during the transaction and you will have the option to either continue or cancel the transaction. You can also find out what the fee will be by calling the provider´s toll-free automated customer service number or visiting the provider´s website shown below. If you pay by credit card before filing your return, please enter on page 1 of Form 1040 in the upper left corner the confirmation number you were given at the end of the transaction and the amount you charged (not including the convenience fee).

Official Payments Corporation
1-800-2PAY-TAXSM (1-800-272-9829)
1-877-754-4413 (Customer Service)
www.officialpayments.com

Link2Gov Corporation
1-888-PAY-1040SM (1-888-729-1040)
1-888-658-5465 (Customer Service)
www.PAY1040.com

You may need to (a) increase the amount of income tax withheld from your pay by filing a new Form W-4, or (b) make estimated tax payments for 2006. See Income Tax Withholding and Estimated Tax Payments for 2006 on page 62.

What if You Cannot Pay?

If you cannot pay the full amount shown on Line 75 when you file, you can ask to make monthly installment payments for the full or a partial amount. You may have up to 60 months to pay. However, you will be charged interest and may be charged a late payment penalty on the tax not paid by April 17, 2006, even if your request to pay in installments is granted. You must also pay a fee. To limit the interest and penalty charges, pay as much of the tax as possible when you file. But before requesting an installment agreement, you should consider other less costly alternatives, such as a bank loan or credit card payment.

To ask for an installment agreement, use Form 9465. You should receive a response to your request for installments within 30 days. But if you file your return after March 31, it may take us longer to reply.

Line 76 - Estimated Tax Penalty

You may owe this penalty if:

  • Line 75 is at least $1,000 and it is more than 10% of the tax shown on your return, or
  • You did not pay enough estimated tax by any of the due dates. This is true even if you are due a refund.

For most people, the “tax shown on your return” is the amount on your 2005 Form 1040, line 63, minus the total of any amounts shown on lines 66a and 68 and Forms 8828, 4137, 4136, 5329 (Parts III through VIII only), and 8885. Also subtract from line 63 any tax on an excess parachute payment and any excise tax on insider stock compensation of an expatriated corporation. When figuring the amount on line 63, include the amount on line 62 only if line 64 is more than zero or you would owe represent the penalty even if you did not include those taxes. But if you entered an amount on Schedule H, line 7, include the total of that amount plus the amount on Form 1040, line 62.

Exception. You will not owe the penalty if your 2004 tax return was for a tax year of 12 full months and either of the following applies.

  1. You had no tax liability for 2004 and you were a U.S. citizen or resident for all of 2004, or
  2. The total of lines 64, 65, and 67 on your 2005 return is at least 100% of the tax shown on your 2004 return (110% of that amount if you are not a farmer or fisherman and your adjusted gross income shown on that return is more than $150,000, or married filing separately for 2005, more than $75,000). Your estimated tax payments for 2005 must have been made on time and for the required amount.

For most people, the “tax shown on your 2004 return” is the amount on your 2004 Form 1040, line 62, minus the total of any amounts shown on lines 65a and 67 and Forms 8828, 4137, 4136, 5329 (Parts III through VIII only), and 8885. Also subtract from line 62 any tax on an excess parachute payment and any excise tax on insider stock compensation of an expatriated corporation. When figuring the amount on line 62, include the amount on line 61 only if line 63 is more than zero or you would have owed the estimated tax penalty for 2004 even if you did not include those taxes. But if you entered an amount on your 2004 Schedule H, line 7, include the total of that amount plus the amount on your 2004 Form 1040, line 61.

Figuring the Penalty

If the Exception above does not apply and you choose to figure the penalty yourself, see Form 2210 (or 2210-F for farmers and fishermen) to find out if you owe the penalty. If you do, you can use the form to figure the amount.

Enter the penalty on Line 76. Add the penalty to any tax due and enter the total on Line 75. If you are due a refund, subtract the penalty from the overpayment you show on Line 72. Do not file Form 2210 with your return unless Form 2210 indicates that you must do so. Instead, keep it for your records.

Tip!Because Form 2210 is complicated, you can leave Line 76 blank and the IRS will figure the penalty and send you a bill. We will not charge you interest on the penalty if you pay by the date specified on the bill. If your income varied during the year, the annualized income installment method may reduce the amount of your penalty. But you must file Form 2210 because the IRS cannot figure your penalty under this method. See the Instructions for Form 2210 for other situations in which you may be able to lower your penalty by filing Form 2210.

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