Arkansas AR1000 Line by Line Guide
Did you know there are 9 States that 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. So what's my point? People who live in these states are able to buy more stuff because they don't pay any state tax. Jealous?
But for the rest of us, residential income tax is a necessary evil; after all it takes a serious bite out of our disposable income. And while the forms are designed to collect the same data, they're all constructed differently. What follows is a breakdown of AR1000, the Arkansas Individual Income Tax Return. If you don't live in Arkansas, don't worry, we'll be tackling the other 34 states soon enough.
Begin by filling in your name, address, Social Security number, and filing status at the top of the form. When you're ready, jump right in and start working through your personal credits. On Line 7a multiply the number of checked boxes by $23. Do the same for the number of dependents and enter the total on Line 7b. On Line 7c multiply the number of developmentally disabled individuals by $500. Now add all your personal credits from Lines 7a through 7c and enter the total on Line 7d and on Line 36.
Enter your wages from your W-2 on Line 8, any military compensation on Line 9, and any minister's income on Line 10. On Line 11, and Line 12 record any interest income and dividend income (just attach Form AR4 if more than $1,500). Now enter any alimony you've received on Line 13. Business, stock, or any other gains or losses go on Lines 14 through 16.
On Lines 17 and 18 record any IRA, annuities, or pension distributions and their taxable amounts. On Lines 19, 20, and 21 enter any rents (add a Schedule E), farm income (add a Schedule F), or any other income. Then add Lines 8 through 21 to get your total income, which goes on Line 22.
If you've been able to secure a border city exemption (include Form AR-TX) enter it on Line23. On Line 24 enter any monies in a deferred tuition savings program. Then on Line 25 enter any other adjustments (just be sure to include Form AR 1000ADJ). Now add Lines 23 through 25 to get your adjusted gross income, which then goes on Line 26. Remember, your AGI is the most important number on your return; it drives your refund, so take your time figuring it.
To figure your tax, you need to check either the low income (box) or the regular table (box). If you're low income, you will not be allowed to itemize and you'll have to enter 0 on Line 29. But if you're using the regular tax table, you can either enter the larger of your itemized deductions or your standard deduction. Just check the instruction booklet to see which is best for you.
Now subtract Line 29 from Line 28 and enter your net taxable income on Line 30. Then enter your tax (from the tax table) on Line 31. Now add the amounts from Lines 31a and 31b to get your combined tax which goes on Line 32. If you've received a lump-sum distribution (include Form AR 1000TD) enter the total on Line 33. If you've incurred any overpayment penalties from an IRA enter that amount on Line 34. Now add Lines 32 through 34 to get your total tax.
Credits, credits, credits, this section is all about credits. Be it personal, child care, or business incentive, record each, just be sure to include the appropriate forms. When you're ready, add them up and record the amount on Line 43. Now subtract Line 43 from Line 35 and to get your net tax which can go on Line 44.
On Line 45 enter your Arkansas withholdings and on Line 46 jot down any estimated tax or credit you paid or earned last year. If you made a payment based on an extension, enter it on Line 47. If the Arkansas early childhood program applies to you, record the certification number and 20% of your federal credit on Line 48. Now add Lines 45 through 48 to get your total payments and put it on Line 49.
If Line 49 (your payments) is greater than Line 44 (your tax), enter the amount of your refund on Line 50. If you want a certain amount of your refund applied to next year, enter it on Line 51. On Line 52 include any check-off contributions; just be sure to attach a Schedule AR1000-CO. Now subtract Lines 51 and 52 from Line 50 to get the amount you want refunded to you. Did you notice the little smiley face on Line 53?
If Line 49 is less than Line 44, you have a tax liability and will have to enter it next to the sad face on Line 54. If you've incurred any sort of penalty, record it in the appropriate box on Line 55. Then add Lines 54 and 55 to get the total amount you owe.
Finish the form in the usual way, by signing, dating, stating your phone number, and occupation. If you had someone work on this form for you, they will have to include their information as well.
Fin
A particularly nice touch (one that you won't find anywhere else), is the mood icons. If you owe, you get a sad face. If you've earned a refund, that frown is turned upside down. Who says the Arkansas department of revenue doesn't have any fun?
