1. Other taxes
Spring 2018, lamc

2. introduction Other tax section shows additional tax due by taxpayer.
Other taxes include –
Self-employment tax
Social Security and Medicare taxes on tip income
Additional taxes on IRAs and other qualified retirement plans
Repayment of first-time homebuyer credit
Tax software will make most of the calculations, and display the ultimate tax due.

3. Who is required to pay self-employment tax?
Self-employment tax: Social Security and Medicare taxes collected for those who work for themselves.
Who is required to pay self-employment tax?
Taxpayer had income as a church employee of $ or more
Taxpayer received net earnings from self-employment income of $400 or more
Self-employment is out of scope of this VITA site.

4. Unreported tip income All tip income is subject to income tax.
Tips of les than $20 per month for an employer are not subject to Social Security and Medicare taxes.
Taxpayers who receive more than $20 per month in tips from any job must report tip income to their employer.
Employer reports tips as Wages on Form W-2, box 1. Employer withholds Social Security and Medicare taxes and federal income tax on that income.
Allocated tips:
Employer can allocate tips to employee if employee worked in restaurant, cocktail lounge, or similar business .
Reported on Form W-2, box 8.
Social Security and Medicare taxes are not withheld here.
Employee pays Social Security and Medicare tax by completing Form 4137
Unreported tip income is beyond the scope of our VITA site.

5. Taxes on IRA and other qualified retirement plans
Taxpayers who take early distributions on a retirement account are subject to an additional 10% tax unless they qualify for an exception.
Code 1 in box 7 of the Form 1099-R means that it is an early distribution.
Refer to Publication 4012, Tab H, Other Taxes, Payments and ACA: H-2 lists common exceptions.
Some common exceptions to penalty for early distributions include:
Distributions due to total and permanent disability
Distributions due to death
Distributions made for qualified higher education expenses
Distributions made for purchase of first home, up to $10,000
If exception applies, Form 5329, Part I must be completed.

6. Repayment of first-time homebuyer credit
Repayments only apply to homes purchased in 2008.
If taxpayer received the first-time homebuyer credit, they must repay the credit over a 15-year period in 15 equal installments. Repayment period began in 2010.
If home ceases to be the taxpayer’s main home before the 15-year period is up, taxpayer must repay all remaining annual installments.
If taxpayer dies, credit does not have to be repaid.