Ohio Form IT-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 IT-1040, the Ohio Individual Income Tax Return. If you don't live in Ohio, not to worry, we'll be tackling the other 34 states soon enough.
The IT-1040 is a well-constructed form, that's a joy to complete. Why? A good example is in large red letters on page 1. Here the Ohio department of taxation practically begs residents to e-file. It claims that if you go paperless, it's free and most will receive their refunds in 5-7 days via direct deposit. Glorious! Therefore, we're super comfortable giving the IT-1040 an 8 of 10 on our user-friendly meter. This form is designed to save its residents time and aggravation. If they had the time to see it, New Yorkers would be jealous.
Begin by filling in your name, address, Social Security number, residency status, and filing status at the top of the form. Really, we just covered more than half of page 1. Just be sure to jot down your school district number before you proceed.
Enter your federal adjusted gross income on Line 1. Then enter any adjustments from the Ohio Schedule 3 (you can find it accompanying this form) on Line 2. Now you can subtract Line 2 from Line 1 to yield your Ohio adjusted gross income, which goes on Line 3.
Multiply the number of your personal and dependent exemptions by $1,650 and put that total on Line 4. Subtract Line 3 from Line 4 on Line 5 to show your Ohio taxable income. Now look up your income in the tax table (it's on pages 35 through 41 of the instruction booklet) to find the tax you owe.
Work through the Ohio Schedule B and enter the total of all your credits on Line 7. Subtract your Ohio tax from your declared credits and put the balance on Line 8. Line 9 provides for an exemption credit; just multiply the number of your personal and dependent exemptions by $20. Now subtract Line 8 from Line 9 with that balance going on Line 10 of page 1 and Line 10a on page 2.
Line 11 allows for a joint filing credit that maxes out at $650. Just take a look at page 19 of the instruction booklet for document requirements. Next subtract that credit from your Ohio tax and put the balance on Line 12. If necessary, you'll have to fill out Schedules B, C, and D on page 4 before you can record your total credits on Line 13 of the main form.
Line 14 gives a tax break to manufacturers. You'll have to include a grant request if you want to claim it. Now subtract Lines 13 and 14 from Line 12 and put the remainder on Line 15. Work through any interest or underpayment penalties along with any unpaid Ohio use tax before adding Lines 15 through 17. This works out to be your total Ohio tax liability, which goes on Line 18.
Record your Ohio withholdings on Line 19 and any overpayment from last year on Line 20. On Line 21 enter any refundable credits; just be sure to include the proper certificates and K-1's. Add Lines 19 through 21d to yield your total payments, which goes on Line 22.
If Line 22 is more than Line 18, you've overpaid. Enter the difference on Line 23. If you want a portion to go toward next year, enter that amount on Line 24. If you're feeling particularly charitable, you can donate to a bunch of good causes on Line 25. Now subtract Lines 24 and 25 from Line 23 to reveal your total refund, which goes on Line 26.
But if Line 22 is less than Line 18, subtract that difference and record the amount you still owe on Line 27. If you've incurred any nasty interest and penalties, those amounts go on Line 28. Just be sure to add any interest/penalties to your tax liability on Line 29.
If you've incurred a penalty or interest (and are due a refund), subtract Line 28 from Line 26 and put the balance on Line 30. As you can see, Line 30 is your refund, it's glorious, and hopefully it's more than $1.01 because the state won't cut a check for anything less. And if you owe less than that $1.01 Ohio will forgive that debt. Yipideedoodah!
All that's left if to sign, date, and jot down your phone number. If you needed a tax pro to help you, they will do the same. I've got to hand it to the Ohio Department of Taxation; this is one of the best state tax forms out there. The best compliment I can give it is, if you're organized, it should take you less than an hour to complete. And that's big, especially since the most valuable resource we have is time.
