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FILE BY DUE DATE

INSTRUCTIONS FOR PREPARING CITY OF BROOK PARK 2006 INCOME TAX FORM

WHO MUST FILE: The City of Brook Park Tax ordinance requires that all Brook Park residents (18 years and older) whether or not their municipal

tax has been fully withheld by their employers, must file. Also, partnerships, corporations and any other entity or person that is resident to Brook

Park, or has income taxable by the city of Brook Park must file. FAILURE TO FILE A RETURN, EVEN IF NO TAX IS DUE, WILL RESULT IN AN

AUTOMATIC FINE OF AT LEAST $25.00, AND ANY LOSS CARRY FORWARD PRIVILEGE WILL BE FORFEITED.

LOTTERY WINNINGS: As of January 1, 2004 are taxable, and need to be included in income.

WHEN, WHERE TO FILE: File with the Department of Taxation on or before April 15 following the close of the tax year. Fiscal year taxpayers shall

file on or before the 15th day of the fourth month following the close of their fiscal year. Extensions must be filed with this office in order to avoid

paying a $25.00 fine. Checks or money orders should be made payable to The City of Brook Park. If tax is not included, the return is not

considered timely filed.

EXTENSION OF TIME FOR FILING RETURNS (NOT PAYMENT OF TAX): An extension request form has been included at the bottom of

this notice. If you need additional time, submit either the form provided (automatic extension until August 15, 2007 for individuals and to date

requested by businesses) or submit a copy of your federal extension. Requests must be received by April 16, 2007, or by the 15th day of the fourth

month following the close of your fiscal year end. If an extension request is not submitted by the due date of the annual return,a

minimum penalty of twenty five ($25.00) dollars will be charged for untimely filing, and any loss carry forward privilege will be forfeited.

Extensions may be denied for untimely filing, outstanding delinquencies on account or failure to file required return, report, or other related

document for a prior period.

TAX PAID TO OTHER CITIES: Multiply each separate W-2 form by 2% to calculate the tax credit. If the actual tax paid is greater than the

calculated tax credit, you must use the calculated tax credit. If the actual tax paid is less than the calculated tax credit, you must use the actual

tax paid. Tax credits will not be given for cities which have over withheld, we suggest you file for a refund from those cities. Tax credits are

prorated for those cities which have changed their tax rate during the year. There is no reciprocity between cities. If you are a non-resident filing

because you work in Brook Park, do not take credit for tax paid to your resident city. Do not deduct, or take credit for income tax payments made

to schools. Record W-2 information in Box 1 of the City of Brook Park return. Payment is due with the filing of the return.

SIGNATURE: Sign and date your return, a return is not “filed” within the meaning of the law until signed by the taxpayer or an agent legally

authorized to sign tax returns for such taxpayer.

PENALTY, INTEREST ASSESSMENTS: Assessments will be issued for failure to file and/or pay taxes when due, refusal to make estimated

tax payments and refusal to file extensions. Minimum late file fee is $25.00, and increases to $50.00 after six (6) months, a second notice or

multiple offenses.

NOTE: DEFINITIONS OF NET PROFITS CHANGED BY STATE LAW!!

NET PROFITS: Net profits for individuals shall consist of Federal Schedule C, E or F. All others compute municipal adjusted federal income

commencing with federal taxable income as determined under the internal revenue code for C corporations before net operating losses and

special deductions and adjusted to the requirements of the Brook Park ordinance. (See Chapter 1703 for definition.) In the case of a

business taxpayer that is not a C corporation or an individual the business taxpayer shall compute federal taxable income as if they were a

C corporation and make the required Schedule X adjustments. Commence calculation with ordinary income (loss) from trade or business

activities. One business enitity’s profit cannot be reduced by another business entity’s loss. Any amount received on a sale of tangible

personal property or real property used in business, in excess of book value shall be treated as taxable income under the ordinance to the

extent of depreciation allowable after January 1, 1967.

CONSOLIDATED RETURNS: Filing of consolidated returns may be permitted of rejected in accordance with the ordinance and corresponding

Rules and Regulations. Returns must be filed consistently.

APPORTIONMENT OF PROFITS: The business apportionment formula (Schedule Y) is to be used by unincorporated businesses, partnerships,

professions, or other entities and corporations doing business inside and outside of the City of Brook Park unless the alternate accounting

method is selected. The percentage must be calculated by utilizing all three ratios. The business percentage is to be applied against the total

net profits wherever derived to determine the portion taxable under the Brook Park Income Tax Ordinance.

NET LOSS CARRIED FORWARD: All business losses must be reported. Business net losses cannot be deducted from W-2 earnings, or

another business entity’s profit. Net losses may be carried forward for a maximum of five (5) years or until exhausted, whichever is earlier,

but may not be carried back. Taxpayers doing business both in and out of Brook Park, who are entitled to allocate profits via Schedule Y,

must also allocate losses accordingly. Returns must be filed timely to take advantage of the five (5) year loss carry forward.

ATTACHMENTS ARE REQUIRED ON ALL RETURNS: W-2’S, W-2G’S, 1099’S, LOTTERY WINNINGS, AND ALL APPLICABLE FEDERAL

SCHEDULES. THE CITY OF BROOK PARK UTILIZES FEDERAL GUIDELINES FOR 2106 EXPENSES;

REMIT SCHEDULE A FROM

FEDERAL FORM 1040, AND REDUCE BY THE 2% IRS REQUIREMENT. IF LINE 4 IS THE ONLY ENTRY ON FORM 2106, DO NOT

SUBMIT UNLESS YOU ALSO PROVIDE PROOF OF COMPLIANCE WITH IRS GOVERNING RULES.

DECLARATION OF ESTIMATED TAX: Based on the City Ordinance, any person anticipating owing more than $40.00 for 2007 must complete

this section and quarterly payments must be made. Nonpayment of estimated tax will subject taxpayer to an assessment. To avoid a fine,

ninety percent of the tax due must be paid by January 31, 2008 or at least an amount equal to the tax paid on the prior years return, if that

return covered a full twelve month period. Accuracy of the declaration is the taxpayer’s responsibililty and can be amended at any time.

Amendments are recommended if your job situation has changed or you have moved out of the city. You may pay the estimate in full with

the return or at any time on or before 1/31/08. Any balance due will be billed over the next three quarters. Payments can be made by cash,

check,credit card or via tax connect online payment system.

OVERPAYMENTS:Overpayments of any year’s taxes shall be applied as follows: 1) to tax owed for any previous years in the order in which

such tax became due; 2) to tax owed for the current or any previous year on the taxpayers associated account and 3) to the taxpayers current

estimated tax liability for the following year when it is evident that the next year’s liability exceeds $40.00. Refunds must be claimed within three

(3) years of the date of payment. Residents use April 15th as the first filing date; non-residents use January 31st as the first filing date. The year

following the year for which the refund is requested will be considered the first year in applying the three year limitation.

City of Brook Park, Ohio Income Tax Return Application for Automatic Extension

FORM

BPEXT

of Time To File 2006 Tax Return. This is not an extension of time to pay your tax.

Last name, first and initial

Your social security number

Corporate / Company Name

Account Number #

If a joint return, spouse’s first name and initial

Spouse’s social security number

Contact Person