Arizona Form 140 Line by Line Guide
Did you know 9 States don’t require residents to pay a personal income tax? Folks that live in Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming are exempt from this extra bill. Furthermore, 7 other states simply enforce a flat tax rate. My point is, people who live in these states are able to buy more stuff because they pay less tax. Jealous?
But for the rest of us, residential income tax is a necessary evil. After all, who’s going to pay for roads, bridges, and the housekeeping of common grounds if we don’t pay tax? And while all the state forms are designed to collect the same data, they’re all constructed differently. If you don’t live in Arizona, not to worry, we’ll be tackling the other 34 states soon enough.
Pound for pound, the Arizona return is one of the toughest out there. It’s long, complicated, and needs an overhaul. The Form 140 is one of those forms that requires you to work through a section on page 2 before you can fill something out on page 1. Ugh!
So we better get started now, because this bad boy is going to take a month of Sundays to complete.
As usual, start with your name, address, Social Security number, and filing status. This is pretty standard procedure and doesn’t change much from state to state. The tricky parts (sorry Arizona residents), come next.
Start at the top of page 2 on Line A1. List your kids and other dependants, their Social Security numbers, and the number of months they lived in your home. Then enter the total number of persons listed in A1 on A2 and box 10 on page 1. Now enter the names of dependents (who don’t qualify as dependents on your federal return) in A3. Then you get to list the number of qualifying parents on A4. When you’re ready, enter the total number listed on A4 in Box 11 on page 1 and on A5.
Confused?
Now flip back to page 1 and enter the number of dependents claimed in Boxes 8 through 11. Do not make the mistake of checking off these boxes, you have to enter the number of dependents for each category in each box.
Okay, so we’re going to take a break from all this page flipping and focus on filling out any additions to your income on page 2. Start with any non-Arizona municipal interest on b6. Now record any ordinary income from lump-sum distributions on Line b7. If federal depreciation applies to you, enter it on b8.
Check page 7 of the instruction booklet if you have questions about MSA distributions, over the limit IRC expenses, and any other additions to your income. When you’re ready, enter what applies on Lines b9, b10, and b11. Now total b6 through b11 and enter the total on b12.
Your mission now is to figure any subtractions to your income. Start by multiplying the number of senior (over 65) exemptions by $2,100 and enter the total on Line c13. Then multiply the number of blind in your household by $1,500 and enter that total on Line c14. Now the number of dependents by $2,300 and enter that on Line c15. Lastly, multiply the number of qualifying parents (or ancestors to your parents AKA grandparents) by $10,000 and enter that number in Box c16. Now add Lines c13 through c16 and put the total on Line c17.
If you don’t have any other subtractions to your income, you can skip Lines c18 through c30. But if costs like recalculated Arizona depreciation and wages of American Indians apply to you, fill out any applicable lines remaining in Part C. When you’re ready, add Lines c18 through c29 and put the total on Line c30. You can also carry this amount to Line 15 on page 1.
On Line 12 enter your federal adjusted gross income (AGI) from your 1040 Form. Then enter any additions to your income (from Line b12) on Line 13. Then you’ll want to include any subtractions to your income from Line c17 or c30 (on page 2) on Line14. Now add Lines 12 and 13 and subtract Line 14 to get your Arizona AGI and put it on Line 15.
See aren’t you glad we worked through page 2 first? Or do you wish you were on a beach somewhere?
On Line 16 jot down any deductions; just make sure they’re either itemized or standardized. On Line 17 record any personal exemptions. Add Lines 16 and 17 then subtract that total from Line 15 and enter the new total on Line 18. Now compute your tax by using the amount on Line 18 and the appropriate number contained in the tax table (you can find the tax table in the instruction booklet). When you’re ready, reenter your total tax on Line 19.
If you needed to fill out Arizona Form 301, enter the total on Line 20. Now add Lines 19 and 20 to get your subtotal of tax, which goes on Line 21. Lines 22 and 23 are slotted for a clean elections tax reduction. If you contributed, figure your reduced tax by subtracting Line 23 from Line 21.
Check page 15 of the instruction booklet to figure your family income tax credit and enter it on Line 25. If you have credits from Arizona forms 301, 321, 322 and 323 enter that total on Line 26, just be sure to record the type of credit it is on Line 27. If you’ve earned a clean elections tax credit, record it on Line 28. Now subtract lines 25, 26, and 27 from line 24 to get the balance of your tax and enter it on Line 29. On line 30 enter any unpaid Arizona Use Tax and finally sum line 30 with Line 29 to get the value that needs to go on Line 31.
Would you believe that the end is near? On Line 32 enter any Arizona withholdings and on Line 33 any estimated tax payments you’ve already made. If you needed to file a Form 204 (for an extension payment) enter that amount on Line 34. Also make sure to declare the Increased Excise Tax Credit on Line 35 if it applies to you. Then see page 18 of the booklet for information on an increased excise tax credit. If you earned a property tax credit, (include Form 140PTC) and record it on Line 36. Then add Lines 32 through Lines 37 to get your total payments and any refundable credits which go on Line 38.
If Line 31 is bigger than Line 38, subtract 38 from 31 to figure the amount of tax you owe. Once you figure it, record your liability on Line 39. But if Line 38 is larger than 31, you overpaid and are due a refund. In that case, subtract Line 31 from Line 38 to see how much you are getting back. Simply enter your refund on Line 40. If you want to apply a portion of your refund to next year’s tax, enter that amount on Line 41. Finish the sections by subtracting Line 41 from Line 40 so you can recover the difference and enter the amount on Line 42.
If you made charitable donations to any of the causes listed in Lines 43 through 53, jot down the dollar amounts. If you made a political gift, check the appropriate party on Line 54. If you incurred an estimated penalty, fill out the appropriate box on Line 55. If you have one of the credits on Line 56 make sure to declare it and attach the correct form. Now add Lines 43 through 53 and 55 and enter that total on 57. Then subtract Line 57 from Line 42 to let the Arizona department of revenue know how much you want returned to you. Just be sure to include your bank’s checking and routing number on line 58. If you owe, include a check for the amount on Line 59.
All that’s left is to sign, date, and state your occupation. If you used a tax preparer (I wouldn’t blame you if you did), make sure they record their vitals below yours.
Done!
One word describes Arizona Form 140 and that’s horrid. Between the flipping back and forth, confusing verbiage, and difficult-to-follow instructions, the Arizona department of revenue should do their residents a favor and blow this thing up. Quite simply it’s misery to move through it. I can understand why it would drive many Sun Devil taxpayers to drink.
