Form 40p Instructions - Oregon Department Of Revenue (Page 6 of 10) in pdf

• Form 1040EZ, line 10, or

Oregon tax

• Telefile Tax Record, tax from second box, line J.

On your federal return did you have:

Tax. Figure the tax on taxable income, line 49.

Use the rate charts on page 35. Fill in the amount

• Alternative minimum tax, Form 1040, line 51?

of tax on line 50.

• Tax on qualified retirement plans, Form 1040, line 53?

Example: A single taxpayer’s taxable income is $19,500.

If so, include these in your federal tax subtraction.

Use tax rate chart A for single taxpayers. The tax is fig-

Caution: Don’t add:

ured like this:

• Self-Employment tax, Form 1040, line 50.

Taxable income

$19,500

• Social Security and Medicare tax on tips, Form 1040,

Subtract

– 5,800

line 52.

13,700

• Advance earned income credit payments, Form 1040,

Multiply by 9%

.09

line 54, or Form 1040A, line 33.

1,233

• Household employment taxes, Form 1040, line 55.

Then add

+ 360

If you file married filing separately for Oregon only,

Their tax is:

$ 1,593

multiply your joint federal tax liability (after credits) by

the percentage calculated on page 11. Each spouse is lim-

Interest on certain installment sales. Do you

ited to a maximum subtraction of $1,500.

have installment sales on which you were required

to pay interest on the deferred tax liability for fed-

Did you pay additional federal tax in 1998 because

eral purposes? If so, you must also compute interest

you were audited or you filed an amended return?

for Oregon. The amount due for Oregon is computed

If so, read the instructions for line 47, “Other deductions

the same way as for federal. The current interest rate

and modifications.”

is 9 percent per year.

Other deductions and modifications. Identify

a. For the part of the year that you were a nonresident,

the deduction or modification in the space on the

use only those installment obligations that arose from

form. If you have more than one, show the type and

dispositions of Oregon property.

amount of each. Modifications can be either additions

b. For the part of the year that you were a resident, con-

or subtractions. You need to sum the total of these items

sider all installment obligations.

and enter that amount on this line.

Enter the total of parts a and b on line 52.

• Federal tax from a prior year. If you paid addi-

Credits

tional federal tax in 1998 because you were audited

or you amended a prior year return, you may be

You must prorate some Oregon credits on your return.

able to deduct the additional tax. See page 18, Form

This means you need to multiply your total credit by your

40N, line 46 instructions, to figure your deduction.

Oregon percentage, line 40, to figure the amount you

• Foreign tax. If you paid tax to a foreign country in

can claim on your Oregon return. The credits that must

be prorated are:

1998, you may be able to deduct these taxes. See page

18, Form 40N, line 46 instructions.

• Exemption.

• Earned income.

• Artists who make a charitable art donation. See

• Working family.

page 36 for taxpayer assistance information.

• Child and dependent care.

• Federal income tax refunds. Did you get a federal tax

• Alternative energy devices.

refund in 1998 because you filed an amended federal

• Elderly or the disabled.

return for a prior year or you were audited? If so, fill

• Farmworker housing.

in and bracket the amount on line 46 if you subtracted

• Fish habitat improvements.

that amount on a prior Oregon return. If you need help,

• Fish screening devices.

see page 36 for taxpayer assistance information.

• Rural medical practitioners, dentists, or optometrists.

• Gambling losses claimed as an itemized deduc-

Earned income credit. You are allowed an

tion. Did you have winnings from Oregon Lottery or

Oregon earned income credit only if you qualify for

Powerball and claim gambling losses on your federal

and claim the earned income credit on your federal return.

Schedule A? If so, fill in and bracket on line 47 the gam-

bling losses that exceed gambling winnings taxed by

Use the following formula to compute your credit:

Oregon.

1. Enter your federal earned income

1. _________

• Special Oregon medical deduction. You may

credit (Form 1040EZ, line 8a; Form

qualify for an additional medical expense deduction

1040A, line 37a; Form 1040, line 59a;

for Oregon. See page 18, Form 40N, line 46 instruc-

or Telefile Tax Record, line K).

tions to figure your deduction.

2. Multiply line 1 by 5 percent (.05).

2. _________

Oregon tax/credits/27

Form 40p Instructions - Oregon Department Of Revenue Page 6

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