Irs Publication 595 - Tax Highlights For Commercial Fishermen - 2001 Page 6
ADVERTISEMENT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16What Is Gross Income?
Percentage From Fishing
2002 tax. If at least two-thirds of your
TIP
gross income for 2001 or 2002 is from
fishing, you can choose either of the
Gross income is all income you receive in the
Figure your gross income from all sources. Then
following options for 2002.
form of money, goods, property, and services
figure your gross income from fishing. Divide
that is not exempt from tax. Gross income is
•
your fishing gross income by your total gross
Make your required annual payment by
not the same as total income shown on line 22
income to determine the percentage from fish-
January 15, 2003, and file your Form 1040
of Form 1040. On a joint return, you must add
ing.
by April 15, 2003.
your spouse’s gross income to your gross in-
•
File Form 1040 by March 3, 2003, and pay
come. To decide whether two-thirds of your
Example 1. James Smith had the following
all the tax due.
gross income was from fishing, use as your
gross income and fishing income in 2001.
gross income the total amount of the following
income (not loss) items from your tax return.
Gross Income
Fiscal year fishermen. If you qualify to use
•
these special rules but your tax year does not
Wages, salaries, tips, etc., from Form
Total Fishing
start on January 1, you can file your return and
1040, line 7.
Taxable interest . . . . . . . . . . .
$3,000
pay the tax by the first day of the 3rd month after
•
Taxable interest from Form 1040, line 8a.
Dividends . . . . . . . . . . . . . . .
500
the close of your tax year. Or you can make your
Rental income (Sch E) . . . . . . .
41,500
•
required annual payment within 15 days after
Ordinary dividends from Form 1040, line
Fishing income (Sch C) . . . . . . .
75,000 $75,000
the end of your tax year. Then file your return
9.
Schedule D . . . . . . . . . . . . . .
5,000
and pay any balance due by the 15th day of the
•
Total . . . . . . . . . . . . . . . . . . $125,000 $75,000
Taxable refunds of state and local taxes
4th month after the end of your tax year.
from Form 1040, line 10.
Schedule D showed gain from the sale of a
•
Due Dates for
Alimony from Form 1040, line 11.
rental house carried over from Form 4797
•
Nonqualified Fishermen
($5,000) in addition to a loss from the sale of
Gross business income from Schedule C
corporate stock ($2,000). However, that loss is
(Form 1040), line 7 (includes gross fishing
If less than two-thirds of your gross income for
not netted against the gain to figure Mr. Smith’s
income).
2000 and 2001 was from fishing, you cannot use
total gross income or his gross fishing income.
•
Gross business receipts from Schedule
the special estimated tax payment procedures
His gross fishing income is 60% of his total gross
C – EZ (Form 1040), line 1 (includes gross
described previously for your 2001 tax year.
income ($75,000 ÷ $125,000 = .60). Therefore,
fishing income).
Instead, you should have made quarterly esti-
based on his 2001 income, he does not qualify
•
mated tax payments on April 16, June 15, and
Capital gains from Form 1040, line 13, in-
to use the special estimated tax payment and
September 17, 2001, and on January 15, 2002.
cluding gains from Schedule D (Form
return due dates for 2001, discussed next. How-
You must file your return by April 15, 2002.
1040). Losses are not netted against
ever, he would qualify if at least two-thirds of his
gains.
If less than two-thirds of your gross income
2000 gross income was from fishing.
•
for 2001 and 2002 is from fishing, you cannot
Gains on sales of business property from
use these special estimated tax payment and
Form 4797, line 14.
Example 2. Assume the same facts as in
return due dates for your 2002 tax year. You
•
Example 1 except that Mr. Smith received only
Taxable IRA distributions, pensions, annu-
generally must make quarterly estimated tax
$21,500, instead of $41,500, rental income. This
ities, and social security benefits.
payments on April 15, June 17, and September
made his total gross income $105,000. He quali-
•
Gross rental income from Schedule E
16, 2002, and on January 15, 2003. You must
fies to use the special estimated tax payment
(Form 1040), line 3.
file your return by April 15, 2003.
and return due dates discussed next, since
•
Gross royalty income from Schedule E
71.4% (at least two-thirds) of his gross income is
For more information on estimated taxes,
(Form 1040), line 4.
from fishing ($75,000 ÷ $105,000 = .714).
see Publication 505.
•
Taxable net income from an estate or trust
Estimated Tax Penalty
Due Dates for
reported on Schedule E (Form 1040), line
for 2001
36.
Qualified Fishermen
•
Income from a REMIC reported on Sched-
If you did not pay all your required estimated tax
If at least two-thirds of your gross income for
ule E (Form 1040), line 38.
for 2001, use Form 2210 – F, Underpayment of
2000 or 2001 was from fishing, you are a quali-
•
Gross farm rental income from Form 4835,
Estimated Tax by Farmers and Fishermen, to
fied fisherman and can choose either of the
line 7 (includes fishing income from
determine if you owe a penalty. If you owe a
following options for your 2001 tax.
Schedule E (Form 1040)).
penalty but do not file Form 2210 – F with your
•
•
return and pay the penalty, you will get a notice
Make your required annual payment, dis-
Gross farm income from Schedule F
from the IRS. You should pay the penalty as
cussed next, by January 15, 2002, and file
(Form 1040), line 11.
instructed by the notice.
your Form 1040 by April 15, 2002.
•
Your distributive share of gross income
•
If you file your return by April 15 and
File Form 1040 by March 1, 2002, and pay
from a partnership, or limited liability com-
TIP
pay the bill within 21 calendar days (10
pany treated as a partnership, from
all the tax due. You are not required to
business days if the bill is $100,000 or
Schedule K – 1 (Form 1065).
make the annual payment. If you pay all
more) after the notice date, the IRS will not
•
the tax due, you will not be penalized for
Your pro rata share of gross income from
charge you interest on the penalty.
failure to pay estimated tax.
an S corporation from Schedule K-1 (Form
1120S).
Do not ignore a penalty notice, even
!
•
if you think it is in error. You may get
Required annual payment. If at least
Unemployment compensation from Form
a penalty notice even though you filed
CAUTION
two-thirds of your gross income for 2000 or 2001
1040, line 19.
your return on time, attached Form 2210 – F, and
was from fishing, only one estimated tax pay-
•
Other income reported on Form 1040, line
met the gross income from fishing test. If you
ment is due. The required annual payment is the
21, not included with any of the items
receive a penalty notice for underpaying esti-
smaller of the following amounts.
listed above.
mated tax that you think is in error, write to the
•
address on the notice and explain why you think
66
/
% (.6667) of your total tax for 2001.
2
3
the notice is in error. Include a computation,
•
100% of the total tax shown on your 2000
similar to the one in Example 1 (under Percent-
return. (The return must cover all 12
age From Fishing, earlier), showing that you met
months.)
the gross income from fishing test.
Page 6
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Financial