Publication 4 |
2000 Tax Year |
Sample Tax Forms
Preparing the various tax forms may look difficult but really is
not. If you follow the forms line by line and refer to the
instructions when necessary, you should be able to complete the forms
easily. On the next few pages are examples of Form W-4, Form
1040EZ, and Schedule C-EZ that you can use as a guide. And don't
forget, if you have any questions, you can contact the IRS.
Form W-4
Rachel Smith is 19 years old and a sophomore at City College. Her
parents pay most of her college costs, including living expenses, and
claim her as a dependent on their tax return. In 2001, Rachel has a
job as a cashier at the ABC Department Store.
Rachel estimates that she will earn about $1,220 during the school
year and about $3,420 during the summer. Also, she usually earns about
$50 a year in interest on checking and savings accounts at a local
bank. Her total income will be about $4,690.
On Rachel's first day of work, her boss gives her Form W-4 to
fill in. Her completed Form W-4 is shown later.
Rachel begins by reading the information and instructions above the
Form W-4 certificate. She reads the information under
"Exemption from Withholding" and the statement on line 7 of Form
W-4. She had a right to a refund of all federal income tax
withheld in 2000 because she had no tax liability. But she expects to
have a tax liability for 2001 because her earned income will be more
than $4,550, and her parents can claim her as a dependent. Rachel
cannot claim exemption from withholding.
Personal allowances worksheet.
Because Rachel is not exempt from withholding, she completes the
Personal Allowances Worksheet on page 1 of Form W-4.
Line A.
Because her parents can claim her as a dependent, Rachel cannot
claim an allowance for herself. So she leaves line A blank.
Line B.
Because she is single and has only one job, she can enter "1"
on line B.
Lines C-G.
Rachel leaves lines C and D blank because she has no spouse or
dependents. She reads the information under "Head of Household"
in the instructions at the top of the form. Rachel realizes that she
cannot claim head of household filing status, so she also leaves line
E blank. She leaves lines F and G blank because she has no children.
Line H.
She adds lines A through G and enters the total of her allowances
(1) in the entry space for line H.
Rachel reads the bulleted items under line H and finds that neither
the first nor the second items apply to her. Following the instruction
for the third bulleted item, she enters the "1" from line H of
the worksheet on line 5 of the form.
Form W-4.
She fills in the identifying information at the top of the form and
checks the "Single" box in item 3. Rachel leaves line 6 blank
because she does not want any additional amount (beyond what claiming
"1" allowance will provide) withheld from her wages.
Because she cannot claim exemption from withholding, she leaves
line 7 blank.
Rachel signs and dates the form at the bottom. Boxes 8, 9, and 10
are left blank. These are for her employer's use, if needed.
Form 1040EZ
Pat Brown is single and has no dependents. She is 22 years old and
a full-time student at State University. She has a scholarship that
covers her tuition and $500 of her room and board each year. Her
parents are able to claim her as a dependent.
In 2000, Pat worked in the community library during the summer. Her
Form W-2 (not illustrated) shows she earned $2,250 in wages and
had $150 in federal income tax withheld during 2000. She also received
a Form 1099-INT showing she had $277 in interest income. She
files Form 1040EZ as explained below. Her completed Form 1040EZ is
shown later.
Name and Address
Pat picked up a Form 1040EZ instructions booklet at the local post
office. She followed the instructions and wrote her name, address,
and social security number as reported on her social security card, in
the space provided on the top of the Form 1040EZ. When she finished
she checked again to make sure everything was written as the
instructions requested.
Presidential Election Campaign Fund.
Pat wants $3 of her taxes to go to this fund, so she checks the
"Yes" box. Checking "Yes" will not change her tax or reduce
her refund.
Income
Pat has two items of income that must be combined and the total
entered on line 1 of Form 1040EZ. The part of her scholarship that is
for room and board ($500) is taxable. She adds this amount to the
wages ($2,250) shown in box 1 of her Form W-2. She enters the
total (2,750.00) on line 1. In the space to the right of "W-2
form(s)," she writes "SCH $500." On line 2, she enters her
interest income of 277.00. She adds her wages, taxable scholarship,
and interest together to figure her adjusted gross income of $3,027.
She enters 3,027.00 on line 4.
Standard Deduction
and Personal Exemption
Because Pat can be claimed as a dependent by her parents, she
checks the "Yes" box on line 5. She uses the worksheet on the
back of her Form 1040EZ to figure the amount to enter on line 5. The
information from her completed worksheet is shown below.
A. |
Amount, if any, from line 1 on the front
$2,750 |
| plus
$250 Enter total > |
A. |
$3,000 |
B. |
Minimum standard deduction. |
B. |
$700 |
C. |
Enter the larger of line A or line B here.
|
C. |
$3,000 |
D. |
Maximum standard deduction. If single, enter $4,400; if
married, enter $7,350. |
D. |
$4,400 |
E. |
Enter the smaller of line C or line D here.
This is your standard deduction. |
E. |
$3,000 |
F. |
Exemption amount. |
| � If single, enter 0. |
| � If married and both you and your spouse can be
claimed as dependents, enter 0. |
| � If married and only one of you can be claimed as
a dependent, enter $2,800. |
F. |
-0- |
G. |
Add lines E and F. Enter the total here and on line 5
on the front. |
G. |
$3,000 |
Pat enters 3,000.00 on line 5.
Note.
If she could not be claimed as a dependent by her parents or
someone else, she would have had a standard deduction amount of $4,400
and a personal exemption of $2,800. In that case, she would have
checked the "No" box and entered $7,200 on line 5.
Payments and Tax
Pat subtracts line 5 (3,000.00) from line 4 (3,027.00) and enters
the result of 27.00 on line 6. This amount is her taxable income. She
will figure her income tax on this amount.
Pat had $150 of federal income tax withheld from her wages by her
employer. She found this amount in box 2 of her Form W-2. She
enters this amount on line 7 of Form 1040EZ.
Because she is under age 25 and her parents can claim her as a
dependent, Pat is not eligible for the earned income credit. She
prints "No" in the space to the right of the word "below" on
line 8.
If she wanted the IRS to compute her tax for her, she would stop at
this point. She would make sure that lines 1 through 8 were completed
accurately, then sign and date the return and enter her occupation.
Pat decides to compute her tax by herself. She adds the amounts on
lines 7 and 8 and enters her total payments (150.00) on line 9.
She goes to the Tax Table in the instructions and reads down the
income column until she finds the line that includes $27, her taxable
income shown on line 6 of her Form 1040EZ. She then reads across the
line to the tax column for single persons to find her tax ($6). She
enters 6.00 on line 10 of her Form 1040EZ.
Refund or Amount You Owe
Pat compares line 9 and line 10. Because line 9 is larger, she
subtracts line 10 (6.00) from line 9 (150.00) to arrive at her refund
of 144.00. She enters this amount on line 11a. She does not want to
have her refund deposited directly into her bank account; therefore
she leaves lines 11b, 11c, and 11d blank. She also leaves line 12
blank. She will receive a tax refund of $144.
Note.
If her employer had not withheld any federal income tax from her
wages, Pat would have owed $6 in income tax. She would have left line
11a blank and entered that amount on line 12. She would then have
enclosed in the envelope with her return a check or money order for
the full amount of $6 payable to "United States Treasury." She
would have written on the front of her check or money order:
- "2000 Form 1040EZ,"
- Her name,
- Her address,
- Her daytime telephone number, and
- Her social security number.
Sign Your Return
Pat checks her return to make sure that she entered the numbers
clearly and correctly and that her math is correct.
Pat enters her occupation (student) and signs and dates her return
at the bottom of the form. She makes a copy of her filled-in tax
return for her records. She attaches a copy of her Form W-2
where indicated on the front of her return. Then she mails her return
to the appropriate Internal Revenue Service Center as indicated on the
back of the instructions.
Schedule C-EZ
Stephen Burke is a high school student. During the summer of 2000,
he mowed lawns for some of his neighbors. He used his father's lawn
mower and paid for gas and oil used in his business.
Stephen kept good records that showed he earned $750, including
tips, and spent $40 on gas and oil. Because his income minus business
expenses is at least $400, he must file Form 1040 and either Schedule
C or Schedule C-EZ, even if this was his only income. Because
his net earnings from self-employment are at least $400,
Stephen must also complete Schedule SE to compute his self-employment
tax. Form 1040 and Schedule SE are not shown here. Stephen chooses to
file Schedule C-EZ. He enters his name and social security
number at the top of the schedule. He then fills in the required
information in Parts I and II. (Stephen's filled-in Schedule
C-EZ is shown at the end of this publication.)
Part II, line 1.
This is where income is reported. All the money he received ($750)
is shown on line 1.
Part II, line 2.
This is where expenses are reported. He lists the $40 for gas and
oil on line 2.
Part II, line 3.
This shows the net profit from the business that is subject to tax.
Stephen must include $710 on Form 1040, line 12.
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