The physical layout of tax forms is largely based on the tax code itself. In addition to boxes for numerical entries, many tax forms contain check boxes to indicate whether a certain condition is true or not. Before actually preparing your tax return, you are likely to receive certain informational tax documents that may contain their own check boxes.
The most common informational tax document is Form W-2. There is a wide array of other informational forms in use, many with their own unique check boxes. Check boxes appear as little squares that are either marked or unmarked. The little square is typically located inside a numbered entry box, along with a very brief description. To prepare your tax return, you need to understand the implications of any checked boxes on forms you might receive.
One of the small squares in box 13 of Form W-2 indicates whether you were actively enrolled in a retirement plan at your place of employment during the year. That check box is important because it determines how much, if any, you can contribute to an individual retirement account on your own.
If you or someone who is your dependent attended college, one of you should receive a Form 1098-T from the school. Full-time attendance is not required to claim the American opportunity credit. Instead, the student must attend on at least a half-time basis for at least one school term. Form 1098-T contains a check box to indicate attendance on at least a half-time basis.
Form 1098-T also contains a separate check box to indicate if the student is in a graduate program. The American opportunity credit is not available to graduate students, so the next best tax benefit to consider is the lifetime learning credit.
Schedule K-1 from a publicly traded partnership
If you are an investor in a partnership, you should receive a Schedule K-1 after the end of the year to summarize your share of the partnership gain or loss. If the investment is in a publicly traded partnership, however, the deduction of a passive loss may have to be suspended until a later year. Schedule K-1 used by partnerships contains a check box near the top of the form to indicate whether the partnership is publicly traded.
Check boxes play a pivotal role in the tax preparation process, opening or closing certain options. Contact an accountant at companies like Hough & Co CPA for more details about tax preparation services.