New Jersey Form NJ-1040 Line by Line Guide - TaxBox.org

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 NJ-1040, the New Jersey Individual Income Tax Return. If you don't live in Jersey, not to worry, we'll be tackling the other 34 states soon enough.

Simply put, I'm not a fan of the NJ-1040 and here's why:

Instead of allowing residents to use their federally adjusted gross income, New Jersey will make you refigure it. Those extra steps make for a super-long form.
The signature section is on page 1 of a form that is 3 pages long. I bet more than a few residents have swung and missed this curveball.
There's isn't any space to record your direct deposit information. That means if you mail in your return, you'll have to wait for snail mail to deliver your refund.
Weird language, like Line 57, which says your 2012 tax. How many are wondering what the heck that means? Don't worry I've got you covered.

Therefore, we're giving this form a 4 of 10 on our user-friendly meter. It's length, poor construction, and verbiage has made it one of the worst in country. Congratulations New Jersey Division of Taxation, you've outdone yourselves.

Begin by filling in your name, address, Social Security number, and county municipality code at the top of the form. Next, take care of your filing status and exemptions before working through the dependents section. Now feel free to sign, date, and send off your return to a PO Box in Trenton. If you needed a tax pro to help you, they will do the same.

Wait a minute! Where's the rest of the form? Silly, silly me, we still have to work through 2 pages and 65 lines before we're done. Darn, drat, and all that.

Enter your wages, salaries, etc. on Line 14 at the top of page 2. Next enter any taxable interest, dividends, profits from a business, gains from selling property and pension (or any other IRA) withdrawals on Lines 15 through 19. Lines 20 and 21 will only apply if you've earned income from a partnership or if you own a share of an S corporation.

If you've got a gain from a rent or patent, record that amount on Line 22. If you won money gambling or received alimony, jot those on Lines 23 and 24. If you have any other income that hasn't yet been mentioned, put it on Line 25. Now add Lines 14, 15a, and 16 through 25 to get your total income, which goes on Line 26.

Pension and other retirement exclusions go on Line 27 then are subtracted from Line 26 with the balance going on Line 28. To calculate your exemption amount, you'll need page 29 of the booklet; just put it on Line 29 when you figure it. Record any medical expenses on Line 30 and alimony payments on Line 31. If a qualified conservation contribution or a health deduction applies, enter those amounts on Lines 32 and 33 respectively.

Now add Lines 29 through 33 to get your total exemptions and deductions, which goes on Line 34. Next subtract Line 34 from Line 28 to yield your taxable income, which goes on Line 35. On Line 36a enter your property taxes and fill in the bubble on Line 36b if you were a New Jersey homeowner on Oct 1 2010.

Figure your property tax deduction by checking page 35 of the instruction booklet and putting the amount on Line 36c. Now subtract Line 36c from Line 35 and put the balance on Line 37. Finish the page by recording your tax on Lines 38 and 39, (you can find the exact amount on page 53 of the tax table).

If you paid income taxes elsewhere, declare those amounts on Line 40. Then subtract Line 41 from Line 39 to yield your tax balance. If you're entitled to a sheltered workshop credit, enter it on Line 42, then subtract Line 42 from Line 41 and put that balance on Line 43.

If you bought stuff out of state (and didn't pay taxes for it), you'll have to pay a use tax; see the instruction booklet and enter the amount on Line 44 if it applies. If you've underpaid your estimated tax and have incurred a penalty, enter it on Line 45. Now add Lines 43 through 45 to get your total tax with penalty, which goes on Line 46.

Enter your New Jersey withholdings on Line 47 and any property tax credits on Line 48. Estimated tax payments go on Line 49, earned income tax credits on Line 50, and other excess withholdings on Lines 51 through 53. Now add Lines 47 through 53 and put the sum on Line 54. This amount equals your total payments and credits.

If Line 54 is less than Line 46, you still owe state tax; just enter the difference on Line 55. But if Line 54 is more than 46, you've overpaid, enter that difference on Line 56. If you want to apply some of your refund to your 2011 tax, enter that amount on Line 57. Don't get confused by the vague language used on Line 57, it's referring to an estimated payment for next year. I told you in the beginning, I'd clear that up.

Feel free to donate to a plethora of charitable causes before adding Lines 58 through 63 to show all the deductions from your overpayment. Finish the form by simply subtracting Line 64 from Line 56 to reveal your final refund, which goes on Line 65. At this point the form asks you to sign your return on page 1.

If you're due a refund, send your return to:
NJ Division of Taxation
Revenue Processing Center
PO Box 555
Trenton, NJ 08647-0555

If you owe, mail your check to:
NJ Division of Taxation
Revenue Processing Center
PO BOX 111
Trenton, NJ 08645-0111

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