Form 1040 M

Form 1040 Schedule M or Making Work Pay Credit is used to reduce the individual’s tax liability or to increase tax refund. This is the only special tax credit that allows a taxpayer to claim a refund without owing any tax.

Any employee or self-employed person may avail of this tax credit on income derived from work. Tax credit may be up to $800 for married individuals who filed jointly, provided, that their earned income is not below $12,903. Tax credit can also stay up to $400 for taxpayers filing individually as long as the earned income is not less than $6,451. However, tax credit can be reduced when the taxpayers or their spouses claimed $250 of economic recovery payment for 2010.

In filling out Schedule M, the taxpayer needs to know the total figure of the wages earned for the taxable year. Members of the military must also ensure that the non-taxable combat pay is excluded from their wages.

Making Work Pay Credit is not available for nonresident aliens and for someone who has been claimed as a dependent in a tax return. This form cannot be used by individuals who entered $95,000 or more in line 5 of this document or by married couples who entered an amount not less than $190,000.

Category: Tax Return Forms, Tax refund, and Tax deductions. This form is used to claim a Making Work Pay Tax Credit of as much as $400 or 6.2% credit on earned income. It provides the qualified taxpayers with the opportunity to reduce their tax liability and to increase their tax refunds.

Link to IRS website: http://www.irs.gov/pub/irs-pdf/f1040sm.pdf

 

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