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AUGMENTING 4491W EXERCISES FOR MASSACHUSETTS RETURNS
Rev. 19 Sept 2013 W. Long
This paper describes a procedure for adapting the 2011 version of IRS Publication 4491-W for use
with the 2012 version of TaxWise. All known corrections, additions and clarifications to the original
publication are listed under Updates for 2012 in each exercise. Added to each exercise is information
not found in the 4491-W, suitable for the preparation of a Massachusetts counterpart return. Results
for each exercise are included here, and line-by-line answer keys for both federal and MA returns are
available in a companion document.
EXERCISE 1: HUDSON
Updates for 2012: W-2 Box 4, should read $1340.41
MA adds: W-2, Box 17 make read $1287 (to eliminate MA 2210)
Comment: Non-MA bank interest, savings bond interest. MA Schedule B is required, with
Scratchpad to explain tax-exempt interest.
Clear red and MA HC, and problem is solved. Use BCBS, EIN 96-0000061
Result:
Federal refund $87, MA tax due $64
EXERCISE 2: BERINGER
Updates for 2012: Interview notes, bullets 5-9, all dates plus one
SSA-1099, Box 6 should read $500
SSA-1099, increase year indicators plus one
MA adds: Make W-2 Box 17 $860 to avoid MA 2210
Comment: Includes lump sum Social Security, non-MA bank interest.
Result:
Federal tax due $750, MA tax due $204
EXERCISE 3: CUNNINGHAM
Updates for 2012: Interview notes bullets 1 and 3, dates plus one
MA adds: Make W-2, Box 17 read $2294. Spouse for HC: no dependents, AGI $24000
Comment: Includes simple 1099-MISC
Could add rental deduction here
Result:
Federal refund $233, MA tax refund $399
EXERCISE 4: CLARK
Updates for 2012: None
MA adds: Make Windsor's W-2 Box 17, $1423; make Teena's W-2 Box 17, $1779
Comment: Non-MA bank interest, Unemployment.
Result:
Federal refund $2653, MA refund $824
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EXERCISE A: SCOTT
Updates for 2012: Interview notes, third bullet, years plus one
W-2G change winnings date to 2012 (two places)
Line 74a, page 42, change name from Colby to Alma
MA adds: Correct Davis W-2, Box 16, to 19976.25.
Comment: Non-MA bank interest; non-MA lottery winnings
Results:
Federal refund $5996, MA refund $901
EXERCISE 5: WASHINGTON
Updates for 2012: None
MA adds: Make W-2 Box 17, $1752.
Treat bank interest as an MA bank
Comment: Son does not qualify as dependent
Result:
Federal tax due $244, MA refund $251
EXERCISE 6: CARLTON
Updates for 2012: None
MA adds: House assessed for $230000; RE tax $3600; Water bills total $120
Comment: Introducing Circuit Breaker and College Tuition Credit on Schedule Y, Line 11
Results:
Federal refund $6018, MA refund $822
EXERCISE 7: MOORE
Updates for 2012: Interview Sheet, spouses death to 2010
First bullet, increase years plus one.
W-2 Hawthorn, Box 6 should read $545.52
W-2G Hesser, increase years plus one
MA adds: Make W-2 Box 17 equal $1725.
Interview, add line: Ms. Moore PAID $9600 rent for her non-subsidized apartment.
York is name of broker, municipal bonds are MA (Town of Falmouth)
Comment: Note that since no QW status in MA, status is HOH
Ignore that text says Univ. of Florida, 1099-T says Univ. of Columbus
Results:
Federal refund $5414, MA refund $448
EXERCISE 8: WEBSTER
Updates for 2012: Interview notes, change marriage date to 2013
MA adds: Hampton is an MA bank.
Make Webster W-2, Box 17 equal $1362.70
Comment: Involves Child Care, Education, Itemized deductions, Energy Credit
They must file separately
Results:
Federal refund $1380, MA tax due $226
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EXERCISE 8: TAYLOR
Updates for 2012: Interview notes, change marriage date to 2013
MA adds: None
Comment: Simple self-employment, MA-PV generated
Results:
Federal refund $622, MA tax due $249
PROBLEM B: GRAHAM
Updates for 2012: W-2 Hayden Box 4 should read $189.94. Line 49: $6605 change to $6050.
1099 CSA add: The amount in Box 5 was for health insurance premium
W-2G Hanover increase years by one. Line 16: change matter to manner.
Line 49, move the line Check tuition..... Grahams to Line 66, and add
No Education credit had been claimed for Jeremy in previous years.
Line 50, change last line to Complete form 8880 if applicable
Line 52, should read ...an energy efficient electric hot water heater..
MA adds: The Butler Police are located in the Georgia town of Columbus, Zip 31914.
Jackson Federal is a Massachusetts bank. XYZ interest is not MA tax-exempt.
Comment: Jury duty paid to employer is entered on 1040 Line 35
He is entitled to a $3000 health exclusion on Butler pension, not included in Box 2a
Social Security does not count in dependency calculation for Grandma
Results:
Federal refund $5270, MA tax due $80
Optional Amendment: Use the Advanced Supplement (originally for Sterling) on p. 147 of the
2011 4491-W to create an amended return for Graham.
Updates for 2012: Change names of Paula and Steve to Stacey and Sean.
All stock cost basis was provided by the broker
MA adds: Stacey previously contributed $25000 to her IRA, has taken no distributions.
They paid $100 in MA estimated taxes once in April and again in September.
Create a Simplified Method example for the OPM CSA 1099-R by changing Box 9b to
$21670, change amount in Box 2 to zero, assume he began taking distributions on
1 September 2011, without joint and survivor benefits.
Comment: Be sure to check box in both 1040X and MA CA-6 before changing original returns.
Results: Federal refund $5135, MA Tax due $226
PROBLEM 9: BAYLOR
Updates for 2012: Interview Sheet, Box 10, make read 06/12/2012 deceased
Interview Sheet, Part II, change spouse death year to 2012
Interview notes, third bullet, make year 2012
W-2G Casino Royale, make dates (2) 2102
MA adds: None
Comment: Deceased spouse, triggers MA Form 1310
Included: DF & AS Military pension, Itemizing, Gambling
'Official' Federal refund of a $51 using IN on Sales Tax Worksheet
Results:
Federal tax refund $51, MA refund $120
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PROBLEM 10: AUSTIN
Updates for 2012: None
MA adds: IRA history: He contributed $12000 over his working years, took distributions of
$2330 total in previous years after turning seventy.
Comment: Includes Allocation of refund, RRB-1099R, simplified method, home buyer credit.
Results:
Federal refund $1440/$820, MA refund $644
PROBLEM 11: FLEMING
Updates for 2012: Interview notes, first bullet, make paper cost 1025
Same, add Dayton Community College, 123 Main Street, 45404
Fourth bullet, make date January 2012
Eighth bullet, make date June 2012
MA adds: Her IRA distribution was her first. She had contributed 18000 in earlier years
She had applied $250 of last year's refund to this year's tax. Park is an MA bank.
Comment: Includes self-employment, disability retirement, early withdrawal penalty, child
care.
Because of a bug in TWO, you must enter Grete (Code 1) first followed by James
(Code 0) in the Dependents section of TWO Main Info Sheet, to produce the
correct result populated on MA Form 1, page 2, line 13.
Results:
Federal tax due $163, MA tax due $20
PROBLEM 12: STERLING
Updates for 2012: Interview notes, fourth bullet, add He has a 1099B showing cost basis.
Last bullet, taxable amount of Social Security for 2011 was $4197
Last bullet, taxable amount of Social Security for 2010 was $4166
Last bullet, taxable amount of Social Security for 2009 was $4126
MA adds: All interest income paid from Massachusetts banks
Make Box 12 of both 1099Rs $1000 (MA state tax withheld)
Comment: Includes Simplified Method and lump sum Social Security
Results:
Federal refund $237, MA tax refund 357
PROBLEM C: KENT
Updates for 2012: DFAS 1099R, Box 2, add $1200
Line 49, add Kara's college was Indy Community College, 789 Southway, 46249.
MA adds: Lottery winnings were from the MMA Lottery Commission. Karl has recovered his
cost in his IRA. Kendall is an MA bank. Omit K-1, add $1050 non-MA bank interest.
Comment: The XYZ tax-exempt interest is paid from Vermont municipal bonds.
Note that of Kara's $475 Educator Expense, $125 can be applied to Schedule A.
Results:
Federal refund $2225/$2225, MA refund of $152