|Form 1040 Instructions 2005
||2005 Tax Year
Tax and Credits
If you were born before January 2, 1941, or were blind at the end of 2005, check the appropriate box(es) on Line 39a. If you were married and checked the box on Form 1040, line 6b, and your spouse was born before January 2, 1941, or was blind at the end of 2005, also check the appropriate box(es) for your spouse. Be sure to enter the total number of boxes checked.
If you were partially blind as of December 31, 2005, you must get a statement certified by your eye doctor or registered optometrist that:
- You cannot see better than 20/200 in your better eye with glasses or contact lenses, or
- Your field of vision is 20 degrees or less.
If your eye condition is not likely to improve beyond the conditions listed above, you can get a statement certified by your eye doctor or registered optometrist to this effect instead.
You must keep the statement for your records.
If your spouse itemizes deductions on a separate return or if you were a dual-status alien, check the box on Line 39b. But if you were a dual-status alien and you file a joint return with your spouse who was a U.S. citizen or resident at the end of 2005 and you and your spouse agree to be taxed on your combined worldwide income, do not check the box.
Line 40 - Itemized Deductions or Standard Deduction
In most cases, your federal income tax will be less if you take the larger of your itemized deductions or standard deduction.
If you checked the box on line 39b, your standard deduction is zero.
To figure your itemized deductions, fill in Schedule A.
Most people can find their standard deduction by looking at the amounts listed under All others’ to the left of Form 1040, Line 40. But if you, or your spouse if filing jointly, can be claimed as a dependent on someone´s 2005 return or you checked any box on Line 39a, use the worksheet or the chart on page 36, whichever applies, to figure your standard deduction. Also, if you checked the box on Line 39b, your standard deduction is zero, even if you were born before January 2, 1941, or were blind.
Line 42 - Exemptions
Taxpayers housing individuals displaced by Hurricane Katrina. You may be able to claim an additional exemption amount of $500 per person (up to $2,000) if you provided housing to a person who was displaced from his or her main home because of Hurricane Katrina and all of the following apply.
- The person displaced lived in your main home for at least 60 consecutive days in 2005.
- You did not receive any rent or other amount from any source for providing the housing.
- The main home of the person displaced was, on August 28, 2005, in the Hurricane Katrina disaster area.
- The person displaced was not your spouse or dependent.
For details, see Form 8914.
Adjusted gross income (line 38) over $109,475. Use the Deduction for Exemptions Worksheet below to figure your deduction for exemptions unless you are filing Form 8914.
Line 44 - Tax
Do you want the IRS to figure your tax for you?
Yes. See Pub. 967 for details, including who is eligible and what to do. If you have paid too much, we will send you a refund. If you did not pay enough, we will send you a bill.
No. Use one of the following methods to figure your tax. Also include in the total on Line 44 any of the following taxes.
- Tax from Forms 8814 and 4972. Be sure to check the appropriate box(es).
- Tax from recapture of an education credit. You may owe this tax if (a) you claimed an education credit in an earlier year, and (b) either tax-free educational assistance or a refund of qualified expenses was received in 2005 for the student. See Form 8863 for more details. If you owe this tax, enter the amount and "ECR" on the dotted line next to Line 44.
Tax Table or Tax Computation Worksheet. If your taxable income is less than $100,000, you must use the Tax Table that begins on page 65 to figure your tax. Be sure you use the correct column. If your taxable income is $100,000 or more, use the Tax Computation Worksheet on page 77.
However, do not use the Tax Table or Tax Computation Worksheet to figure your tax if any of the following apply.
Form 8615. Forms 8615 must generally be used to figure the tax for any child who was under age 14 at the end of 2005, and who had more than $1,600 of investment income, such as taxable interest, ordinary dividends, or capital gains (including capital gain distributions). But if neither of the child´s parents was alive at the end of 2005, do not use Form 8615 to figure the child´s tax. Also, a child born on January 1, 1992, is considered to be age 14 at the end of 2005. Do not use Form 8615 for such a child.
Schedule D Tax Worksheet. If you have to file Schedule D and Schedule D, line 18 or 19, is more than zero, use the Schedule D Tax Worksheet on page D-9 of the Instructions for Schedule D to figure your tax.
Qualified Dividends and Capital Gain Tax Worksheet. If you do not have to use the Schedule D Tax Worksheet (see above), use the worksheet on page 38 to figure your tax if any of the following apply.
- You reported qualified dividends on Form 1040, line 9b.
- You do not have to file Schedule D and you reported capital gain distributions on Form 1040, line 13.
- You are filing Schedule D and Schedule D, lines 15 and 16, are both more than zero.
Schedule J. If you had income from farming or fishing, your tax may be less if you choose to figure it using income averaging on Schedule J.
Line 45 - Alternative Minimum Tax
Use the worksheet below to see if you should fill in Form 6251.
An electronic version of this worksheet will be available on www.irs.gov in 2006. Enter “AMT Assistant” in the Search box on the website.
Exception. Fill in Form 6251 instead of using the worksheet below if you claimed or received any of the following items.
- Accelerated depreciation.
- Stock by exercising an incentive stock option and you did not dispose of the stock in the same year.
- Tax-exempt interest from private activity bonds.
- Intangible drilling, circulation, research, experimental, or mining costs.
- Amortization of pollution-control facilities or depletion.
- Income or (loss) from tax-shelter farm activities or passive activities.
- Income from long-term contracts not figured using the percentage-of-completion method.
- Interest paid on a home mortgage not used to buy, build, or substantially improve your home.
- Investment interest expense reported on Form 4952.
- Net operating loss deduction.
- Alternative minimum tax adjustments from an estate, trust, electing large partnership, or cooperative.
- Section 1202 exclusion.
- Any general business credit.
- Qualified electric vehicle credit.
- Nonconventional source fuel credit.
- Credit for prior year minimum tax.
Form 6251 should be filled in for a child who was under age 14 at the end of 2005 if the child's adjusted gross income from Form 1040, line 37, exceeds the child's earned income by more than $5,850.
Line 47 - Foreign Tax Credit
If you paid income tax to a foreign country, you may be able to take this credit. Generally, you must complete and attach Form 1116 to do so.
Exception. You do not have to complete Form 1116 to take this credit if all five of the following apply.
- All of your gross foreign source inbility come was from interest and dividends and all of that income and the foreign tax paid on it were reported to you on Form 1099-INT or Form 1099-DIV, or Schedule K-1 (or substitute statement).
- If you had dividend income from shares of stock, you held those shares for at least 16 days.
- You are not filing Form 4563 or excluding income from sources within Puerto Rico.
- The total of your foreign taxes was not more than $300 (not more than $600 if married filing jointly).
- All of your foreign taxes were:
- Legally owed and not eligible for a refund, and
- Paid to countries that are recognized by the United States and do not support terrorism.
For more details on these requirements, see the Instructions for Form 1116. Do you meet all five requirements above?
Yes. Enter on line 47 the smaller of (a) your total foreign taxes, or (b) the amount on Form 1040, Line 44.
No. See Form 1116 to find out if you can take the credit and, if you can, if you have to file Form 1116.
Line 48 - Credit for Child and Dependent Care Expenses
You may be able to take this credit if you paid someone to care for:
- Your qualifying child under age 13 whom you claim as your dependent
- Your disabled spouse who could not care for himself or herself.
- Any disabled person not able to care for himself or herself whom you claim as a dependent (or could have claimed as a dependent except that person received $3,200 or more of gross income or filed a joint return).
- Any disabled person not able to care for himself or herself whom you could have claimed as a dependent except that you, or your spouse if filing jointly, could be claimed as a dependent on someone else’s 2005 return.
- Your child whom you could not claim as a dependent because of the rules for Children of divorced or separated parents that begin on page 20.
For details, use TeleTax topic 602 (see page 8) or see Form 2441.
Line 49 - Credit for the Elderly or the Disabled
You may be able to take this credit if by the end of 2005 (a) you were age 65 or older, or (b) you retired on permanent and total disability and you had taxable disability income. But you usually cannot take the credit if the amount on Form 1040, line 38, is $17,500 or more ($20,000 or more if married filing jointly and only one spouse is eligible for the credit; $25,000 or more if married filing jointly and both spouses are eligible; $12,500 or more if married filing separately). See Schedule R and its instructions for details.
Credit Figured by the IRS. If you can take this credit and you want us to figure it for you, see the Instructions for Schedule R.
Line 50 - Education Credits
If you (or your dependent) paid qualified expenses in 2005 for yourself, your spouse, or your dependent to enroll in or attend an eligible educational institution, you may be able to take an education credit. See Form 8863 for details. However, you cannot take an education credit if any of the following apply.
- You or your spouse filing jointly are claimed as a dependent on someone’s (such as your parent’s) 2005 tax return.
- Your filing status is married filing separately.
- The amount on Form 1040, line 38, is $53,000 or more ($107,000 or more if married filing jointly).
- You are taking a deduction for tuition and fees on Form 1040, line 34, for the same student.
- You (or your spouse) were a nonresident alien for any part of 2005 unless your filing status is married filing jointly.
Line 51 - Retirement Savings Contributions Credit
You may be able to take this credit if you, or your spouse if filing jointly, made (a) contributions to a traditional or Roth IRA; (b) elective deferrals to a 401(k), 403(b), governmental 457, SEP, or SIMPLE plan; (c) voluntary employee contributions to a qualified retirement plan (including the federal Thrift Savings Plan); or (d) contributions to a 501(c)(18)(D) plan.
However, you cannot take the credit if either of the following applies.
- The amount on Form 1040, line 38, is more than $25,000 ($37,500 if head of household; $50,000 if married filing jointly).
- The person(s) who made the qualified contribution or elective deferral (a) was born after January 1, 1988, (b) is claimed as a dependent on someone else’s 2005 tax return, or (c) was a student (defined below).
You were a student if during any 5 months of 2005 you:
- Were enrolled as a full-time student at a school, or
- Took a full-time, on-farm training course given by a school or a state, county, or local government agency.
A school includes a technical, trade, or mechanical school. It does not include an on-the-job training course, correspondence school, or Internet school.
For more details, see IRS TeleTax Topic 610 or see Form 8880.
Line 52 - Child Tax Credit
What is the Child Tax Credit?
This credit is for people who have a qualifying child (defined below). It is in addition to the credit for child and dependent care expenses on Form 1040 Line 48, and the earned income credit on Form 1040, Line 66a.
Three Steps To Take the Child Tax Credit!
Step 1. Make sure you have a qualifying child for the child tax credit (defined below).
Step 2. Make sure you checked the box on Form 1040, line 6c, column (4), for each qualifying child.
Step 3. Answer the questions on this page to see if you may use the worksheet on page 42 to figure your credit or if you must use Pub. 972, Child Tax Credit. If you need Pub. 972, see page 7.
Questions-Who Must Use Pub 972?
1. Is the amount on Form 1040, line 38, more than the amount shown below for your filing status?
- Married filing jointly – $110,000
- Single, head of household, or qualifying widow(er) – $75,000
- Married filing separately – $55,000
Yes. STOP. You must use Pub. 972 to figure your credit.
No. Go to question 2.
2. Are you claiming any of the following credits?
- Adoption credit, Form 8839 (see the instructions for Form 1040, line 53, on page 43).
- Mortgage interest credit, Form 8396 (see the instructions for Form 1040, line 54, on page 43).
- District of Columbia first-time homebuyer credit, Form 8859.
Yes. STOP. You must use Pub. 972 to figure your credit.You will also need the form(s) listed above for any credit(s) you are claiming.
3. Are you excluding income from Puerto Rico or are you filing any of the following forms?
- Form 2555 or 2555-EZ (relating to foreign earned income).
- Form 4563 (exclusion of income for residents of American Samoa).
Yes. STOP. You must use Pub. 972 to figure your credit.
No. Use the worksheet on page 42 to figure your credit.
Line 53 - Adoption Credit
You may be able to take this credit if either of the following applies.
- You paid expenses to adopt a child.
- You adopted a child with special needs and the adoption became final in 2005.
See the Instructions for Form 8839 for details.
Include the following credits on line 54 and check the appropriate box(es). To find out if you can take the credit, see the form indicated.
- Mortgage interest credit. If a state or local government gave you a mortgage credit certificate, see Form 8396.
- District of Columbia first-time homebuyer credit. See Form 8859.
Line 55 - Other Credits
Include the following credits on line 55 and check the appropriate box(es). If box c is checked, also enter the form number, if applicable. To find out if you can take the credit, see the form or publication indicated.
- Credit for prior year minimum tax. If you paid alternative minimum tax in a prior year, see Form 8801.
- Qualified electric vehicle credit. If you placed a new electric vehicle in service in 2005, see Form 8834.
- General business credit. This credit consists of a number of credits that usually apply only to individuals who are partners, shareholders in an S corporation, self-employed, or who have rental property. See Form 3800 or Pub. 334.
- Empowerment zone and renewal community employment credit. See Form 8884.
- Credit for alcohol used as fuel. See Form 6478.
- Renewable electricity, refined coal, and Indian coal production credit for electricity and refined coal produced at facilities placed in service after October 22, 2004, and Indian coal produced at facilities placed in service after August 8, 2005. See Form 8835, Section B.
- New York Liberty Zone business employee credit. If you have a carryforward credit from Form 8884, see Form 8835, Section B.
- Nonconventional source fuel credit. If you sold fuel produced from a nonconventional source, or you were an owner of royalty interests and you received income from the sale of fuel produced from a nonconventional source, you may be able to take this credit. See Form 8907.
- Qualified zone academy bond credit. This credit applies only to S corporation shareholders. See Form 8860.
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