State Plans

Facts

Start the Tax Planner and open a new plan. Enter the following information for the plan:

*Any state will suffice for this exercise. Open the Generic State Setup window and note the default settings.

Click each of the tabs and note the addition of state-specific entries for each of the worksheets. Close the plan without saving.

Program Considerations

The Generic State worksheets comprise a tool for you to use to estimate state tax. The objective is to provide you with a logical representation of the steps necessary to arrive at state adjusted gross income, state taxable income, and state tax.

Many of the Income worksheets have "state" fields. Enter amounts for the state when they differ from the amounts recognized on the federal return. Differences between the two are accumulated and presented on the Modifications worksheet under the Adjustments tab.

Federal adjusted gross income is the starting point for calculating state adjusted gross income. Automatic calculations and fields for direct entry of the most common differences between federal and state adjusted gross income are provided to quickly arrive at state adjusted gross income.

The program will use the instructions provided by the state's Department of Revenue to calculate standard deduction and tax. These are the same calculations found in the Lacerte Tax program. With few exceptions, the income tax will be identical to that figured in the tax program for the same filing status and taxable income. States with multiple tax rates (e.g. Oklahoma) or states (e.g. Vermont) that calculate tax while giving consideration to the character (e.g. capital gains) of the components of the taxable income may arrive at a different amount of tax for the same taxable income and filing status because of these considerations.

Fields to enter credits, and contributions are provided, including credit for taxes paid to other states.

Use the Generic State Setup window to determine which additions, subtractions, and other modifications to include for each state's calculations.

How?

To add a state in the Plan Options:

1. Start the 2005 Tax Planner program.
2. Select Create a new plan.
3. Enter the Information from the Plan Options and Taxpayer and Spouse tables above.
4. Select your state from the list.
   
5. Click OK.

To set Generic State Options:

1. Click Generic State Setup on the Settings menu.
   
2. Adjust your state(s) as necessary.
   
3. Click OK

Tips & Shortcuts

• If you prepare state plans for all or most of your clients, you can check the Save as default plan options for new plans box after you select your state so that this type of plan becomes the default.
  

Review

You should have been able to enter a state and note the options and worksheets available for state plans.

Troubleshooting

Problem: I made a mistake when I setup my state in the Generic State Setup window, and now I can't remember if certain items were checked when I started.

Solution: You can check the Restore from Defaults button to reset this screen to the program's defaults for the state selected.

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