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 1, the Wisconsin Individual Income Tax Return. If you don't live in Wisconsin, not to worry, we'll be tackling the other 34 states soon enough.
Due to a high level of inconvenience, Wisconsin's Form 1 ranks in the lower third of the nation. Why? There isn't a place to record your direct deposit information, so you'll have to wait a good long while for your refund. Wisconsin doesn't allow you to e-file and it requires you to do your return in black ink, so don't make a mistake. Oh, and you'll have to send it to different addresses based on it's outcome. So based on this data, we're giving the Form 1 a mediocre 6 of 10 on our user-friendly meter.
On the lighter side, one charity listed on the form is the Green Bay Packers. Apparently that organization ranks right up there with the folks that research prostate and breast cancer. In fact, the Packers appear to be on par with the environment, veterans, firefighters, and military families. Jeesh! We like the Packers as much as anybody, just not more than firefighters or our armed forces.
Begin by filling in our name, Social Security number, and address at the top of the form. Be sure to include your filing status, tax district, and school district number in the following boxes. Here's a hypothetical, do you think the Department of Revenue gives Aaron Rodgers a pass on his taxes?
Enter your federal adjusted gross income on Line 1 and other state-specific additions on Lines 2 through 4. When ready, add the sum of those lines to Line 1 on Line 5. If you received a state tax refund from last year, put it on Line 6.
Lines 7 through 11 are slotted for state-specific subtractions; go ahead and work through them if any apply. When set, add Lines 6 through 11 on Line 12 and subtract Line 12 from Line 5 on Line 13. This is your Wisconsin income.
Carry forward the amount from Line 13 onto Line 14. Then look up page 45 of the booklet to get your standard deduction. If someone else can claim you, be sure to put a check in the little box above Line 16. Work through your exemptions on Line 17 before subtracting Line 17c from Line 16 on Line 18. Based on your income, you can look up your tax in the table on Page 38.
If you're due an itemized deduction credit, include a Schedule 1 and enter the amount on Line 20. The next 5 lines are slotted for credits; if any apply, record the amounts and add them on Line 26. Now you can subtract Line 26 from Line 19 and put the balance on Line 27.
If you have to pay an alternative minimum tax, write it on Line 28 and include a Schedule MT. Now add Lines 27 and 28 on Line 29. If you've earned a married couple credit, other credits (from a Schedule CR), or paid tax to another state, work through the next few lines. Add Lines 30 through 32 on Line 33 before subtracting Line 33 from Line 29 on Line 34. This is your net tax.
Line 35 is slotted for a economic development surcharge (enclose Schedule EDS if this applies to you), Line 36 a use tax, and Line 37 allows you to donate to some very fine causes. Along with the Packers, you can give to breast cancer research, veterans, firefighters, and the environment.
If you've incurred any IRA (or other retirement plan penalties), multiply those amounts by 33% and include them on Line 38. If you've been slapped with other penalties (check page 29 of the booklet), include the amount on Line 39. Now add Lines 34 through 36 and 37k through 39 on Line 40, which will finish page 2.
Carry forward the amount from Line 40 at the bottom of page 2, to Line 41 at the top of page 3. Now you can record your Wisconsin withholdings on Line 42; just be sure to attach your W-2 or any other statement that identifies the amount of your withholdings. If you made an estimated tax payment, include it on Line 43. If you qualify for any of the credits on the next 6 lines, work through the necessary Schedules before adding Lines 42 through 49 on Line 50.
Now comes the fun part. If Line 50 is bigger than Line 41, subtract the difference on Line 51, this is the amount you overpaid. Enter the amount of Line 51 you want refunded on Line 52. If you want a portion to go toward next year, enter it on Line 53.
But if Line 50 is smaller than Line 41, enter the difference on Line 55; this will be the amount you owe. Just an FYI: The Department of Revenue requests you paperclip payment to the front of your return. All that's left is to sign, date, and jot down your telephone number at the bottom of your return. If you had a tax pro help you, they will do the same.
As I mentioned, Wisconsin is one of those states where you will have to mail your return to a different address based on the outcome.
If you have tax due send it to:
Wisconsin Department of Revenue
P.O. Box 268, Madison WI 53790-0001
If you are due a refund send it to:
Wisconsin Department of Revenue
P.O. Box 59, Madison WI 53785-0001
If you claimed the homestead credit send it to:
Wisconsin Department of Revenue
P.O. Box 34, Madison WI 53786-0001