Pensions and Annuities

Taxpayers receiving payments or distributions1 from any pensions or annuities must report such income on Line 16 of Form 1040. To do so, a taxpayer gathers all Form 1099-R statements issued during the year. These forms are sent from each bank, mutual fund, or institution where a taxpayer holds a retirement account, pension or an […]

Other Income

Taxpayers earning taxable income from a source not reported elsewhere on Form 1040 (Line 7 – Line 20) or on any associated schedules can list such income on the form’s Line 21 miscellaneous section. To do so, the taxpayer must total all sources of “other income” and enter the dollar amount accordingly (if necessary, include […]

Domestic Production Activities Deduction (DPAD)

The IRS offers a significant tax deduction for businesses that operate a considerable amount of their business domestically. Under a “safe harbor” rule, businesses can take Form 1040’s Domestic Production Activities Dedication (“DPAD”) (see Line 35) if at least 20 percent of total business expenses are the result of US-based direct labor and overhead costs. […]

Additional Child Tax Credit

The IRS has long given preferential tax treatment to taxpayers with dependent children. One such example is Form 1040’s Child Tax Credit (Line 51). Notwithstanding a taxpayer’s eligibility for that credit, the IRS also offers a lesser known child credit on Line 65 – the Additional Child Tax Credit (“ACTC”). To determine ACTC eligibility, a […]

Certain Business Expense Deductions for Reserve members, performing artists, and fee-basis government officials

Line 24 of Form 1040 offers an opportunity for qualifying Reserve members, performing artists, and certain government officials to deduct job-related expenses. National Guard or Reserve members: Reserve members of the Army, Navy, Air Force, Marine Corps, Coast Guard, Army National Guard, Air National Guard, or Public Health Service Reserve Corps may deduct expenses related […]