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Welcome to DOR's Tax Talk Blog

Tax Talk is a weekly blog published each Wednesday by the Indiana Department of Revenue (DOR) that discusses tax tips, DOR programs, and helpful information for tax preparers. During tax season blogs are posted on both Mondays and Wednesdays. 

 

Most Recent Blog Posts

Military Retirement Income Deduction Changes

February 20, 2019

Are you a retired member of our nation’s military or a surviving spouse? If so, then you should know about important changes in reporting your retirement income or benefits for your 2018 Indiana tax return.

If your income includes military retirement income and/or survivor’s benefits, you may be eligible to take the Military Retirement Income and/or Survivor’s Benefits Deduction (632). The maximum deduction has increased to $6,250.

Also, the age requirement has been eliminated, allowing retirees under 60 years of age and surviving spouses to take the deduction.

There have also been changes on how to complete your Indiana tax return when taking this and other deductions. In years past, eligible taxpayers included the Military Retirement Income and/or Survivor’s Benefits Deduction on Line 7 of Schedule 2.

This year, those taking the deduction should use Line 11 on Schedule 2; enter “Military Retirement Income” or “Survivor’s Benefits” for the deduction name and “632” for the code number. The amount of the deduction should be the amount of military retirement income and/or survivor’s benefits included on line 1 of Form IT-40 or $6,250, whichever is less.

If both you and your spouse received military retirement income and/or survivor’s benefits, you may each claim the deduction for a maximum of $12,500 (up to $6,250 each).

You must enclose your military retirement income statements and/or survivors benefit statements along with your tax return if you claim this deduction.

You can read more information on the Military Retirement Income and/or Survivor’s Benefits Deduction in the IT-40 instruction book and 2018 tax year forms and in Tax Information Bulletin #6.

If you have questions, please call DOR Customer Service at (317) 232-2240 Monday through Friday, 8 a.m. - 4:30 p.m. EST.

 

Top 10 Tips for Tax Professionals

February 18, 2019

Even the most experienced and knowledgeable tax professional can run into issues or have questions during tax season. That’s why DOR created online resources and tools to assist tax professionals and volunteers including a special Top 10 Tax Tips just for you.

Top 10 Tips for Tax Professionals:

1. Only use forms provided by DOR or DOR certified and approved tax preparation software and be sure to regularly update your tax software.

2. If your customer is filing for a federal extension, please indicate in the appropriate checkbox. A separate extension is not necessary for the state return if filing for a federal extension.

3. Report losses using a negative sign (e.g. -505, not (505)).

4. Do not black out the barcode found at the bottom of some forms and payment coupons. DOR uses this information to quickly and efficiently process forms.

5. Include all necessary schedules and income statements when filing a paper return (for example, Schedule CT-40PNR with a Form IT-40PNR).

6. Assemble paper returns in order. There is a sequence number in the upper-right corner of each schedule.

7. Do not staple or paper clip returns or enclosures, including payments.

8. Include taxpayer identifying information on checks. Each year, tens of thousands of checks are submitted to DOR without the necessary identifying information. Taxpayers who electronically file a tax return and wish to pay by mail should not send a paper copy of the tax return along with their check. Please use the appropriate payment voucher and document the taxpayer(s) names, Social Security numbers and tax year on the check.

9. Have the appropriate paperwork on file (usually a Power of Attorney form) to discuss your client’s return with DOR.

10. Advise clients to immediately open and respond to all mail from DOR. Many issues can be resolved with a quick phone call or by providing additional documentation.

Are you looking for a tax professional to prepare your 2018 tax returns? Be sure to check among the members of the Indiana CPA Society or the Indiana Society of Enrolled Agents. Don’t forget to visit the DOR website for tips for finding tax preparers.