Michigan Form MI-1040 Line by Line Guide
Did you know 9 states do not 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 bill. Furthermore, 7 other states simply enforce a flat tax rate. So what's the moral to the story? People who live in these states are able to buy more stuff because they pay less tax.
But for the rest of us, residential income tax is a necessary evil, one that 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 Form MI-1040, the Michigan Individual Income Tax Return. If you don't live in Michigan, not to worry, we'll be tackling the other 34 states soon enough.
Residents know Michigan employs a flat tax rate. That means you won't have to look up your taxable income on some kooky tax table. Instead, you simply multiply your taxable income by a very fair 4.35%. The rest of the form is streamlined and intelligently constructed. So I'm very comfortable giving the Michigan Mi-1040 a 7 of 10 on the user friendly meter.
Start by filling in your name, address, social security number, and school district code at the top of the form. Then fill in your filing status, residency, and check the box if 2/3 of your income comes from farming, fishing, or seafaring. Once you decide whether you want to give to the state campaign fund, feel free to proceed.
Line 9 has seven sub lines that breaks down all your exemptions and gives you an allowance for each. For example, the number of exemptions you claimed on your federal return is multiplied by a healthy $3,700. The number of seniors or disabled folks living with you gets multiplied by $2,400. The number of children18 and under (that you claimed as Michigan exemption) is multiplied by $600.
If you have disabled veterans in your home, multiply each by $300. And if you collected unemployment income (and it represented 50% or more of you adjusted gross income), you're due another $2,400. When you're set, add up all your exemptions and put the total on Line 9h and Line 15.
On Line 10, enter your federal adjusted gross income, you'll get this number from your federal tax return. Then include any Michigan additions to your AGI on Line 11, just attach a Schedule 1 if any apply. Then add Lines 10 and 11 with the sum going on Line 12. If you have any subtractions to your AGI, include a Schedule 1 and put the number on Line 12.
Now subtract Line 13 from Line 12, the balance then goes on Line 14. Next, subtract your exemption allowance (from Line 14) to get your taxable income, this amount goes on Line 16. To figure your tax, multiply Line 16 by Michigan's flat tax rate of 4.35% and put that total on Line 17.
If you have any nonrefundable credits include those amounts on Line 18, just attach a Schedule 2 for support. Now subtract Line 18 from Line 17 and put the balance on Line 19. Just don't forget to fill out your direct deposit information before moving on to page 2.
Carry forward the amount of taxable income from Line 19 of Page 1 to Line 20 of Page 2. Next, you'll need to work through any use tax (on out of state purchase), before you can add Lines 20 through 21 to get your total tax. Your total Michigan tax goes on Line 23.
Include any property tax credits on Line 24, just attach an MI-1040CR for support. If you've earned a farmland preservation credit, put that amount on Line 25 and include the MI-1040CR-5. If you've earned a stillbirth credit, or any qualified adoption expenses, put those amounts on Lines 27 and 28.
Continue with the credit section by jotting down any federal earned income credit and Michigan earned income credit on Lines 28a and 28b. Energy efficient home credits and Michigan historic preservation credits go on Lines 29 and 30, if they apply.
On Line 31 record your Michigan withholdings, you can get this from your W-2. Michigan asks you not to include your W-2 with your return and that's very unusual. On line 32 include any extension or other credits from last year. Finish the section by adding lines 24 through 27, 28b, and lines 29 through 32 on Line 33.
Now comes the fun part. If Line 33 is less than Line 23, subtract it from line 23 to figure how much your still owe the state of Michigan. Just be sure you include any interest and penalties before finalizing Line 36. But if Line 33 is greater than Line 23, subtract Line 23 from Line 33 to yield your overpayment, just work through Line 34 before recording that glorious figure on Line 35.
All that's left is to sign and date your return before sending it off to the appropriate address. If you do have a refund coming, be sure to send your return to the Michigan department of Treasury located at zip code 48956. If you owe, send it to the same Michigan department of Treasury, but at zip code 48929.
While it may seem strange, a couple of states make you send your return to different addresses based on its outcome, Nebraska being one of them. So while its not unprecedented, it's not ideal. Just be aware of the difference, so you don't find yourself waiting for your refund or incurring any unnecessary penalties and interest.
