Individual Reading Earnings Tax Return - 2006 (Page 2 of 2) in pdf

PAGE 2

THIS PAGE TO BE COMPLETED ONLY BY THOSE WHO HAVE MUNICIPAL TAXABLE INCOME OTHER THAN WAGES OR WHO CLAIM EXPENSES AS A

DEDUCTION FROM SUCH WAGES.

14. PROFIT FROM ANY BUSINESS OWNED (ATTACH COPY OF FEDERAL SCHEDULE C)…………………$____________________

15. RENTAL INCOME (ATTACH COPY OF FEDERAL SCHEDULE E)……………………………………………..$____________________

16. OTHER TAXABLE INCOME (ATTACH COPY OF APPROPRIATE FEDERAL SCHEDULE)………………..$____________________

17. TOTAL OTHER INCOME (LINES 14 THRU 16)………………………………………………………………………………..………………….. $____________________

18. DEDUCTIONS (SEE INSTRUCTIONS)

a. EMPLOYMENT EXPENSES INCLUDED IN LINE 1 THAT ARE ALLOCABLE TO READING………….$____________________

(ATTACH FEDERAL SCHEDULE 2106)

b. NON-TAXABLE OR NET LOSS PER PREVIOUS RETURN…………………………………………………$____________________

c. TOTAL DEDUCTIONS…………………………………………………………………………………………………………………………….$____________________

19. NET OTHER TAXABLE INCOME (INSERT IN LINE 2 PAGE 1)………………………………………………………………………………….$____________________

INSTRUCTIONS

FOR COMPLETION OF LINES 1 THRU 19

1. Should be the total of gross wages received. If two income family, W-2s should be added together. All W-2’s must be attached.

(Photocopies are acceptable).

2. All other taxable income reported lines 14 through 19. INTEREST, DIVIDEND, AND RETIREMENT INCOME (FROM A DISTRIBUTION) ARE

NOT TAXABLE. Business / Rental losses may not be used to offset W-2 compensation.

5. Credit for tax paid to another City for 2006 is limited to 2.0% (PER W-2) of the amount of income on which tax was withheld. You must take each

W-2 and compute the tax credit individually – then insert the total of those tax credits on Line 5c.

a. List tax withheld by employer for Reading.

b. Total estimated tax paid to Reading.

c. Credit for tax paid to another City must be adjusted to credit limitation of 2.0% on that portion taxed by said City.

Tax credit per individual may not exceed 2.0%. Excess credit paid to other Cities may not be applied to spouse’s tax credit.

d. Overpayment carried from prior year.

e. Total lines 5a through 5d.

PLEASE NOTE

If only a portion of a Reading resident’s income (W2 wages) is taxed by the City of employment, the untaxed balance of

the individual’s income for 2006 is subject to the 2.0% Reading tax.

7. OVERPAYMENT WILL BE APPLIED TO CURRENT YEAR ESTIMATE UNLESS RESIDENT MOVED OUT OF READING.

8. Insert the amount of income you expect to make for 2007. Estimation should not be less than last year’s earnings unless otherwise noted.

Multiply by tax rate of 2.0%. (TAX RATE INCREASE EFFECTIVE JANUARY 1, 2007).

11. You may pay the entire amount declared with the filing of this form.

15. Complete if gross income on all rental property owned exceeds $300.00 per month ($3600.00 per year).

16. Capital gains from the sale of depreciable property are taxed to the extent of depreciation taken (attach Federal 4797).

Retirement income as well as interest & dividend income is not taxable. Income earned through full or part-time employment is subject to tax

even if retired.

18. Deductions will be allowed only when a W-2 is attached and all expenses must be substantiated by proper schedules.

a. Employment expenses are allowable only with respect to wages on which tax is paid to Reading.

b. Operating losses may be carried forward for a maximum of three (3) years.

EXAMPLES OF DEDUCTION THAT ARE NOT ALLOWED: Individual Retirement Account (IRA); Roth IRA; Simplified Employee Pension (SEP) plan;

Keogh (H.R. 10) Retirement Plan: Federal Schedule A deductions.

EXTENSION POLICY: An extension request may be granted provided an I.R.S. extension has been secured and estimated tax has been paid (at least

90% of estimate is due by January 31

). This is due on or before April 15

. The extension must include the 1

quarter estimate payment for the current

tax year (If applicable). This is an extension to file your tax return, not to pay.

NOTE: Unless accompanied by all required substantiating documents, payment of the balance of the Tax Declared Due (Line 6) and, if required, at least

¼ of the Estimated Tax (Line 10), this form is not a legal final return or declaration.

DECLARATION AND RETURN PAYMENT CALENDAR

APRIL 15,

JULY 31,

OCTOBER 31,

JANUARY 31,

FILE TAX RETURN,

QUARTER

BALANCE DUE AND 1

PAYMENT DUE

QUARTER PAYMENT

FAILURE TO FILE A REQUIRED RETURN AND/OR PAY TAXES DUE BY DUE DATE SUBJECT YOU TO IMPOSITION

OF PENATIES AND INTEREST.

Individual Reading Earnings Tax Return - 2006 Page 2

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