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Payment, Estimates & EIC Menu

 Estimated Payments Made for 2019 Estimated Payments from K-1

The program automatically pulls this figure from entries made on line 13A of Form 1041 K-1. To access the K-1 menu, from the Main Menu of the tax return (Form 1040) select:

  • Income
  • Rents, Royalties, Entities (Schedule E, K-1, 4835, 8582)
  • K-1 Input

 State Estimated Payments

Enter the total state estimated tax payments that were made for the current tax year. Also, include any overpayment from the previous tax year’s tax return that was designated to be credited to the current year’s estimated tax. The State Estimated Payments menu will allow you to enter estimated payments made to multiple states. The estimated payments will then carry to each applicable state.

 Other Federal Withholdings (Form 1099)

Amounts shown as federal income tax withheld on Forms W-2, W-2G, 1099-R, as well as federal tax withheld on dividends, interest income, unemployment compensation, social security benefits are added together and entered on Form 1040. If the taxpayer has federal withholding from a source that is not entered elsewhere in the program, the amount can be entered here.

NOTE: A return with an amount entered in Other Federal Withholdings cannot be e-filed unless it is marked as being withheld from Form 1099. If you include an amount on this line and indicate that the withholdings are not from a 1099, the return will have to be mailed.

 Other State Withholdings

Include on this line any additional state withholdings that your client may have paid that are not accounted for anywhere else. Entries in this menu will flow to the state return indicated.

 Earned Income Credit … Sch EIC Additional Child Tax Credit … 8812 Amount Paid with Extension … 4868 Excess FICA & Medicare Tax

Employers that withhold more than the correct amount of income, Social Security, or Medicare taxes from wages must reimburse the employee for the excess. Over-withheld income taxes must be reimbursed before the end of the calendar year. Overpayment will most likely occur if the taxpayer worked at more than one job during the year earning a high salary. Keystone Tax Solutions Pro will determine whether excess Social Security and Medicare tax has been withheld and report the excess amount in the Payments, Estimates & EIC menu.

 Shareholders LT Gains … 2439

Undistributed capital gains are reported to mutual fund shareholders when the mutual fund retains some of its long-term capital gains and pays taxes on the undistributed amounts. The taxpayer treats their share of these gains as distributions, even though they did not actually receive them. However, they are not included on Form 1099-DIV. The amounts are reported to the taxpayer on Form 2439.

Report undistributed capital gains (box 1a of Form 2439) as long-term capital gains on Schedule D, Form 1040. Enter the part reported to you as Unrecaptured Section 1250 Gain on the Unrecaptured Section 1250 Gain Worksheet. For any gain on qualified small business stock, follow the reporting instructions under Section 1202 Exclusion. Enter the collectibles gain on line 1 of the 28% Rate Gain Worksheet in the Schedule D instructions. A credit can also be claimed for the amount of tax paid on Form 1040.

 Federal Tax Paid on Fuels Credit … 4136

Use Form 4136 to claim a credit for certain nontaxable uses (or sales) of fuel during the income tax year. Form 4136 is used by an individual claiming the alternative fuel credit, a blender claiming a credit for a diesel-water fuel emulsion, or a producer claiming a credit for an alcohol fuel mixture, biodiesel or renewable diesel mixture, or an alternative fuel mixture.

Instead of waiting to claim an annual credit on Form 4136, you may file:

  • Form 8849 to claim a periodic refund; or
  • Form 720 to claim a credit against your taxable fuel liability.

 Health Coverage Tax Credit … 8885 Apply Refund

Enter the amount, if any, of the overpayment the taxpayer would like applied to next year’s estimated tax. The IRS will apply this amount to their account unless a statement is attached requesting them to apply it to the spouse’s account. Include the spouse’s social security number in the attached statement.

 Direct Deposit Information Generate 2019 Estimates … 1040-ES Payment Voucher … 1040-V Underpayment of Estimated Tax … 2210 Farmers Underpayment of Tax … 2210-F

Use Form 2210-F to figure any underpayment penalty. Do not attach it to the return unless box 1a or box 1b is checked. However, if neither box applies to the taxpayer and they owe a penalty, Form 2210-F does not need to be completed. The IRS can figure the penalty and send the taxpayer a bill.

 Virgin Islands Tax Allocation … 8689

Use Form 8689 to figure the amount of U.S. tax allocable to the U.S. Virgin Islands (USVI). A U.S. citizen or resident alien (other than a bona fide resident of the USVI) that had income from sources in the USVI or income effectively connected with the conduct of a trade or business in the USVI may owe tax to the USVI, calculated as percentage of the U.S. tax liability.

 IRC 1341 Repayment Amount Premium Tax Credit (PTC) … 8962

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1 Keystone Tax Solutions Pro through SurveyMonkey surveyed 757 users of Keystone Tax Solutions Pro online tax preparation software 4/1/19 through 4/17/19. 93% of Keystone Tax Solutions Pro respondents reported that they continue to use Keystone Tax Solutions Pro software after switching.

Updated on September 9, 2020

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