Instructions For Form L-1040 - 2014-2015 (Page 2 of 5) in pdf

L-1040 RESIDENT INSTRUCTIONS

LINE 8 – RENTAL REAL ESTATE, ROYALTIES, ESTATES, TRUSTS,

PARTNERSHIPS, ETC.

On Page 2, line 30a enter all rental real estate and royalty income (or

LINE 1-EXEMPTIONS

loss) included on your federal return and received while a resident of

Each individual filing a Lapeer income tax return is allowed one

Lapeer. Attach copies of federal Schedule E and federal Form 8582.

personal exemption. On a joint return, the taxpayer and the spouse

Page 2, line 30b report your share of the partnership, trust, estate, etc.

are allowed one personal exemption each.

Do not prorate

income (or loss) received while a resident of Lapeer. Enter only your

exemptions of part-year residents.

share of ordinary income. Your share of interest, dividends, gains or

An individual who is 65 years of age or older may claim one

losses, etc., are treated as belonging to you as an individual and should

additional personal exemption. On a joint return, the taxpayer and/or

be reported accordingly. Attach copies of federal Schedule E, federal

the spouse, if they qualify, may claim an additional exemption for

Form K-1 (1065) and federal Form 8582.

being 65 years of age or older.

Income from an estate or trust is taxable to a Lapeer resident and must

Individuals who are legally blind may claim one additional personal

be included in the amount reported on page 1, line 9 regardless of the

exemption. On a joint return, the taxpayer and/or the spouse, if they

location of the estate or trust, or the location of property it may own.

qualify, may claim an additional exemption for being blind.

Page 2, line 30c report all Subchapter S corporation distributions

Individuals who are disabled (paraplegic, quadriplegic or hemiplegic,

received while a resident of Lapeer. Attach copies of federal Schedule

or who is totally or permanently disabled person) may claim one

K-1 (Form 1120S).

additional personal exemption. On a joint return, the taxpayer and/or

Do not include gains, losses or other deductions from a Subchapter S

the spouse, if they qualify, may claim an additional exemption for

corporation on this return.

Subchapter S Corporation gains are not

being disabled.

taxable and losses are not deductible by a resident. All corporations

taxable under the City Income Tax Ordinance must file a Lapeer

LINE 2 & LINE 3- GROSS INCOME FROM EMPLOYERS

Corporation income tax return.

All wages, salaries, tips, sick pay, bonuses, deferred compensation,

Add the amounts reported on page 2, lines 30a through 30c. Enter the

severance pay and other compensation (box #1 of Form W-2)

total on page 2, line 30d and page 1, line 8.

earned while a resident of Lapeer are taxable regardless of where

earned and must be included on lines 2 & 3. Box #18 of Form W-2

LINE 9 – OTHER INCOME

is not to be used for reporting income.

Page 2, lines 31a through 31e are used to report other income including

Add lines 2a through 2d for wages and tax withheld columns and

alimony received, lottery winnings, premature pension plan distributions

enter on lines 3a and 3b.

(prior to qualifying for retirement) including distributions that are received

LINE 4 – INTEREST

from qualified trusts upon termination of employment and receive

Enter interest from your federal return minus interest from obligations

treatment as gains under the Federal Internal Revenue Code, any other

of the United States and subordinate units of government. Interest

income reported on federal Form 1099, and premature Individual

received while a resident of Lapeer is taxable regardless of where

Retirement Account (IRA) distributions (Before age 59 ½) excluding

earned.

ROTH IRA conversions included in federal adjusted gross income.

Normal distributions and pensions are not taxable. Attach a separate

LINE 5 – DIVIDENDS

schedule if more than five items are reported. Attach a copy of each

Enter dividends from your federal return minus dividends from

Form 1099.

obligations of the United States and subordinate units of

Add the amounts reported on page 2, lines 31a through 31e. Enter the

government.

Dividends received while a resident of Lapeer are

total on page 2, line 31f and on page 1, line 9.

taxable regardless of where earned.

LINE 10 – TOTAL INCOME

LINE 6 – PROFIT (OR LOSS) FROM BUSINESS, PROFESSION

Add lines 3b through 9 and enter on line 10

OR FARM (Complete lines 28a – 28f, page 2)

On page 2, line 28a; enter the net profit (or loss) from a business or

DEDUCTIONS:

profession. Lapeer residents are taxed on the net profits from their

IMPORTANT: The following deductions are limited to the amount

operation of a business or profession, regardless of where it is

claimed on your federal return, except meals. The deductions are

located. Attach a complete copy of federal Schedule C and/or

limited by the extent they apply to income taxable under the Lapeer

federal Schedule F.

Income Tax

Ordinance.

Part-year residents must

allocate

The federal rules concerning passive losses are applicable to losses

deductions the same way they allocate income.

deducted on this return.

Enter on line 28d the applicable portion of your net operating loss

carryover. A net operating loss (NOL) carryover may be deducted.

The only deductions allowed by the Lapeer Income Tax Ordinance are as

Carryback losses are not allowed (Ord. Sec. 7(2)). Expenses for

follows:

business use of home other than mortgage interest, property taxes

and casualty losses cannot be added to a Schedule C net loss, but

LINE 11 – INDIVIDUAL RETIREMENT ACCOUNT, KEOGH, SEP, OR

must be carried over.

SIMPLE RETIREMENT PLAN DEDUCTIONS

A KEOGH, SEP or SIMPLE retirement plan deduction must be

Contributions to an Individual Retirement Account plan are deductible to

entered on line 28e.

the same extent deductible under the Internal Revenue Code. Attach

Multiply line 28a by line 28b put on line 28c. Add lines 28c and

page 1 of federal return. ROTH IRA contributions are not deductible.

subtract lines 28d and 28e. Enter the total on line 28f and on page

1, line 6.

LINE 12 – EMPLOYEE BUSINESS EXPENSES DEDUCTION

Employee business expenses are an allowable deduction only when

LINE 7 – CAPITAL GAINS OR LOSSES

incurred in the performance of service for an employer and only to the

The Lapeer Income Tax Ordinance follows the Internal Revenue

extent not reimbursed by the employer. Meal expenses are not subject to

Code regarding capital gains.

All capital gains received while a

the reductions and limitations of the Internal Revenue Code. Under the

resident of Lapeer are taxable regardless of where the property is

Lapeer Income Tax Ordinance meals must be incurred while away from

located, with the following exceptions:

home overnight on business to be deductible.

A. Gains on sales of obligations of the United States and subordinate

BUSINESS EXPENSES ARE LIMITED TO THE FOLLOWING:

units of government.

A. Expenses of transportation (but not transportation to and from work).

B. The portion of any gains attributable to the time period before

B. Expenses of travel, meals and lodging while away from home

January 1, 1967 on any sales or exchanges of property purchased

overnight on business for an employer.

prior to that date.

C. Expenses incurred as an "outside salesperson" away from the

C. Capital loss carryovers that originated in a year the taxpayer was

employer's place of business. (This does not include driver-salesperson

not a resident of the City are not deductible.

whose primary duty is service and deliver).

Instructions For Form L-1040 - 2014-2015 Page 2

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