Line 58 - Social Security and Medicare Tax on Tip Income Not Reported to Employer

If you received tips of $20 or more in any month and you did not report the full amount to your employer, you must pay the social security and Medicare or railroad retirement (RRTA) tax on the unreported tips. You must also pay this tax if your Form(s) W-2 shows allocated tips that you are including in your income on Form 1040, line 7.

To figure the social security and Medicare tax, use Form 4137. If you owe RRTA tax, contact your employer. Your employer will figure and collect the RRTA tax.

You may be charged a penalty equal to 50% of the social security and Medicare tax due on tips you received but did not report to your employer.

Line 59 - Additional Tax on IRAs, Other Qualified Retirement Plans, etc.

If any of the following apply, see Form 5329 and its instructions to find out you owe this tax and if you must file Form 5329.

1. You received an early distribution from (a) an IRA or other qualified retirement plan, (b) an annuity, or (c) a modified endowment contract entered into after June 20, 1988, and the total distribution was not rolled over in a qualified rollover contribution.
2. Excess contributions were made your IRAs, Coverdell education savings counts (ESAs), Archer MSAs, or health savings accounts.
3. You received taxable distributions secfrom Coverdell ESAs or qualified tuition programs.
4. You were born before July 1, 1933, and did not take the minimum required distribution from your IRA or other qualified retirement plan.

Exception. If only item 1 applies to you and distribution code 1 is correctly shown in Form 1099-RForm 1099-R, box 7, you do not have to file Form 5329. Instead, multiply the taxable amount of the distribution by 10% (.10) and enter the result on line 59. The taxable amount of the distribution is the part of the distribution you reported on Form 1040, line 15b or line 16b, or on Form 4972. Also, put "No" under the heading "Other Taxes" to the left of line 59 to indicate that you do not have to file Form 5329. But if distribution code 1 is incorrectly shown in Form 1099-R, box 7, or you qualify for an exception for qualified medical expenses, qualified higher education expenses, or qualified first-time homebuyer distributions, you must file Form 5329.

Line 60 - Advance Earned Income Credit Payments

Enter the total amount of advance earned income credit (EIC) payments you recare ceived. These payments are shown in Form(s) W-2, box 9.

Line 61 - Household Employment Taxes

If any of the following apply, see Schedule H and its instructions to find out if you owe these taxes.

1. You paid any one household employee (defined below) cash wages of $1,400 or more in 2004. Cash wages include wages paid by check, money order, etc.
2. You withheld federal income tax during 2004 at the request of any household employee.
3. You paid total cash wages of $1,000 or more in any calendar quarter of 2003 or 2004 to household employees.

For item 1, do not count amounts paid to an employee who was under age 18 at any time in 2004 and was a student.

Household Employee. Any person who does household work is a household employee if you can control what will be done and how it will be done. Household work includes work done in or around your home by babysitters, nannies, health aides, maids, yard workers, and similar domestic workers.

Line 62 - Total Tax

Include in the total on line 62 any of the following taxes. To find out if you owe the tax, see the form or publication indicated. On the dotted line next to line 62, enter the amount of the tax and identify it as indicated.

1. Additional tax on health savings account distributions (see Form 8889). Identify as "HSA."
2. Additional tax on Archer MSA distributions (see Form 8853). Identify as "MSA."
3. Additional tax on Medicare Advantage MSA distributions (see Form 8853). Identify as "Med MSA."
4. Recapture of the following credits.
1. Investment credit (see Form 4255). Identify as "ICR."
2. Low-income housing credit (see Form 8611). Identify as "LIHCR."
3. Qualified electric vehicle credit (see Pub. 535). Identify as "QEVCR."
4. Indian employment credit (see Form 8845). Identify as "IECR."
5. New markets credit (see Form 8874). Identify as "NMCR."
6. Credit for employer-provided child care facilities (see Form 8882). Identify as "ECCFR."
5. Recapture of federal mortgage subsidy. If you sold your home in 2004 and was financed (in whole or in part) from the proceeds of any tax-exempt qualified mortgage bond or you claimed the mortgage interest credit, see Form 8882. Identify as "FMSR."
6. Section 72(m)(5) excess benefits tax (see Pub. 560). Identify as "Sec. 72(m)(5)."
7. Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. This tax should be shown in Form W-2, box 12, with codes A and B or M and N. Identify as "UT."
8. Golden parachute payments. If you received an excess parachute payment (EPP), you must pay a 20% tax on it. This tax should be shown in Form W-2, box 12, with code K. If you received a Form 1099-MISC, the tax is 20% of the EPP shown in box 13. Identify as "EPP."
9. Tax on accumulation distribution of trusts (see Form 4970). Identify as "ADT."
10. Excise tax on insider stock compensation from an expatriated corporation. You may owe a 15% excise tax on the value of nonstatutory stock options and certain other stock-based compensation held by you or a member of your family from an expatriated corporation or its expanded affiliated group in which you were an officer, director, or more-than-10% owner. See Internal Revenue Code section 4985. Identify as "ISC."

Previous | First | Next