How Can I Enter Prisoner Income in ProWeb?
Prisoners also file their federal income taxes the same way non prisoners do.
Check out the IRS Publication 501 to determine whether a specific prisoner is required to file their taxes.
Depending on services performed, a prisoner may receive compensation and be issued with Form W-2 or Form 1099-NEC as may be appropriate. In case they are not issued with Form W-2 by their employer, they can report their income on a substitute Form W-2.
In the calculation of the Earned Income Credit, the earnings gained either as a prisoner in a penal institution, in a halfway house or in a work release program are subtracted from the earned income.
It is a mandatory requirement to show the amount of a Prisoner's earnings that correlates with their work as a prisoner. This is normally done after the prisoner's income has been entered into the tax return.
To show a Prisoner's earned income in. Taxx Savage ProWeb:
- Go to the Federal Section of a Tax Return
- Proceed to the income section
- Select the Less Common Income option
- Then select Other Compensation
- From there go to the Prisoner Earned Income - Use Form(s) W-2 to enter the total earned income. This amount is to be subtracted from the calculation of Earned Income Credit.
Upon completion of the above instructions, the excluded amount as well as the indicator "PRI" will be printed on Line 1 of Form 1040.
Note: This is not tax advice, rather, it is a guide on how to enter prisoner income in the Taxx Savage ProWeb.
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