Line 53 - Social Security and Medicare Tax on Tip Income Not Reported to Employer

If you received tips of $20 or more in any month and you did not report the full amount to your employer, you must pay the social security and Medicare or railroad retirement (RRTA) tax on the unreported tips. You must also pay this tax if your W-2 form(s) shows allocated tips that you are including in your income on Form 1040, Line 7.

To figure the tax, use Form 4137. To pay the RRTA tax, contact your employer. Your employer will figure and collect the tax.  Your employer will figure and collect the tax.

You may be charged a penalty equal to 50% of the social security and Medicare tax due on tips you received but did not report to your employer.

Line 54 - Tax on IRAs, Other Retirement Plans, and MSAs

If any of the following apply, see Form 5329 and its instructions to find out if you owe this tax and if you must file Form 5329.

1. You received any early distributions from (a) an IRA or other qualified retirement plan, (b) an annuity, or (c) a modified endowment contract entered into after June 20, 1988.
2. You made excess contributions to your IRA or MSA.
3. You were born before July 1, 1929, and did not take the minimum required distribution from your IRA or other qualified retirement plan.

Exception. If only item 1 applies to you and distribution code 1 is shown in box 7 of your Form 1099-R, you do not have to file Form 5329. Instead, multiply the taxable amount of the distribution by 10% (.10) and enter the result on Line 54. The taxable amount of the distribution is the part of the distribution you reported on Line 15b or Line 16b of Form 1040 or on Form 4972. Also, put “No” next to Line 54 to indicate that you do not have to file Form 5329. But if distribution code 1 is incorrectly shown in box 7, you must file Form 5329.

Line 55 -- Advance Earned Income Credit Payments

Enter the total amount of advance earned income credit (EIC) payments you received. These payments are shown in box 9 of your W-2 form(s).

Line 56 - Household Employment Taxes

If any of the following apply, see Schedule H and its instructions to find out if you owe these taxes.

1. You paid any one household employee (defined below) cash wages of $1,200 or more in 2000. Cash wages include wages paid by checks, money orders, etc.
2. You withheld Federal income tax during 2000 at the request of any household employee.
3. You paid total cash wages of $1,000 or more in any calendar quarter of 1999 or 2000 to household employees.

For item 1, do not count amounts paid to an employee who was under age 18 at any time in 2000 and was a student.

Household Employee. Any person who does household work is a household employee if you can control what will be done and how it will be done. Household work includes work done in or around your home by babysitters, nannies, health aides, maids, yard workers, and similar domestic workers.

Line 57 - Total Tax

Include in the total on Line 57 any of the following taxes. To find out if you owe the tax, see the form or publication indicated. On the dotted line next to Line 57, enter the amount of the tax and identify it as indicated.

Recapture of the Following Credits.

• Investment credit (see Form 4255). Identify as “ICR.”
• Low-income housing credit (see Form 8611). Identify as “LIHCR.”
• Qualified electric vehicle credit (see Pub. 535). Identify as “QEVCR.”
• Indian employment credit. Identify as “IECR.”

Recapture of Federal Mortgage Subsidy. If you sold your home in 2000 and it was financed (in whole or in part) from the proceeds of any tax-exempt qualified mortgage bond or you claimed the mortgage interest credit, see Form 8828. Identify as “FMSR.”

Section 72(m)(5) Excess Benefits Tax (see Pub. 560). Identify as “Sec. 72(m)(5).”

Uncollected Social Security and Medicare or RRTA Tax on Tips or Group-Term Life Insurance. This tax should be shown in box 13 of your Form W-2 with codes A and B or M and N. Identify as “UT.”

Golden Parachute Payments. If you received an excess parachute payment (EPP), you must pay a 20% tax on it. This tax should be shown in box 13 of your W-2 form with code K. If you received a Form 1099-MISC, the tax is 20% of the EPP shown in box 13. Identify as “EPP.”

Tax on Accumulation Distribution of Trusts. Enter the amount from Form 4970 and identify as “ADT.”

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