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RESIDENT INSTRUCTIONS
Muskegon residents are taxed on the net profits from their operation of SCHEDULE 5—DEDUCTIONS
A business or profession regardless of where it is located. Part-year residents must allocate deductions the same way they allocate
Enter your Schedule C income/loss on line 3a. Enter your SEP income. The only deductions allowed by the Income Tax Ordinance are:
deduction, if applicable, on line 3b. Subtract line 3b. from 3a. and enter
the result on line 3c. You must attach a copy of FederalSchedule C. If Line 1—IRA deduction
you have deducted a SEPcontribution on line 3b. you must attach a The rules governing IRA deductions on this return are the same as
copy of Schedule 1of your Federal Form 1040. under the Internal Revenue Code.
A net operating loss carryover may be deducted if the loss was Contributions to ROTH IRA’s are not deductible.
incurred afterJuly 1, 1993. Attach a schedule showing the calculation Attach Schedule1 of Federal Form 1040.
of any net operating loss carryover deducted from line 3c. You may not ASEPretirement plan deduction must be entered on line 1b. of
deduct a carryback loss. Schedule 4.
Line 4—Income/loss from rents/royalties (for filers of Federal Schedule E, Line 2—Employee business expenses
page one) The employee business expenses listed below are not subject to the
Enter all rent and royalty income included on your Federal Schedule E, same reductions and limitations required under the Internal Revenue
page one and received while a resident of Muskegon. Attach a copy of Code. These expenses are, however, allowed only to the extent not paid
Federal Schedule E, page one. or reimbursed by your employer and only when incurred in the
Line 5—Income/loss from partnerships (for filers of Federal Schedule E, performance of service for your employer.
page two) The only deductions allowed by the City of Muskegon Income Tax
Enter your share of the partnership income/loss on line 5 of Ordinance are as follows:
Schedule 4 as reported on Federal Schedule E, page two. Your share of • Expenses of travel, meals and lodging while away from home
qualifying dividends, gains, etc. are treated as belonging to you as an • Expenses as an outside salesperson who works away from his
individual and should be reported on the appropriate Federal and employer’s place of business (does not include
Muskegon schedules. driver/salesperson whose primary duty is service and delivery).
Attach a copy of Federal Schedule E, page two. • Expenses of transportation (but not transportation to and from
If you are claiming a loss from a partnership located outside of work).
Muskegon, a copy of your Federal Schedule K-1 must be attached. • Expenses reimbursed under an expense account or other
Line 6—Income/loss from sale or exchange of property (for filers of arrangement with your employer, if the reimbursement has been
Federal Schedule D,Form 8949,Form 4797 and/or Form 6252) included in reported gross earnings.
Enter on line 6 the gain/loss from the sale or exchange of real or You must attach a detailedlist of youremployee business expenses.
tangible personal property regardless of where located. The Muskegon Line 3—Moving expenses
Income Tax Ordinance follows the Internal Revenue Code in its treatment Moving expensesfor certain Armed Forces members onlyinto the City
of capital gains, with two exceptions: of Muskegon that qualify under the Internal Revenue Code as a deduction
Gains on the sales of obligations of the United States are not from federal gross income may be deducted on your Muskegon return.
taxable on this return. You must attach a copy of Federal Form 3903 or a list of your moving
Gain or loss on property purchased prior to July 1, 1993 must be expenses, including the distance in miles from where you moved.
determined by one of the following methods: Line 4—Alimony deduction (CHILD SUPPORT IS NOT DEDUCTIBLE)
a) The basis may be the adjusted fair market value of the property Enter alimony deducted on your 2019federal return.
on July 1, 1993 (June 30, 1993 closing price for traded You mustattach a copy of Schedule 1of your Federal Form 1040.
securities), or
b) Divide the number of months the property has been held since COMPLETING YOUR RETURN
July 1, 1993 by the total number of months the property was After completing schedules 1 through 5 as applicable,transfer the
held, and apply this fraction to the total gain or loss as reported results of schedules 1 through 5 to lines 1, 2, 3, 5 and 8 on the front of the
on your federal income tax return. form.
Attach Federal Schedule Dand Form 8949. Also attach Form 4797 Follow the instructions on the front of the form for lines 4, 6 and 7.
and Form 6252 if applicable. Line 9—Tax due
Line 7—Distributions from Subchapter S corporations. If after computing your Muskegon Income tax and deducting your
Enter on line 7 cash or property distributions from S corporations from payments and credits, the balance due is one dollar ($1.00) or more, it
line 16, code D of Federal Schedule K-1. The Muskegon City Income Tax must be entered on Line 9.
Ordinance does not recognize Subchapter S status. Distributions from an Make check or money order payable to CITY OF MUSKEGON and
S corporation are taxable as if paid by a regular corporation as dividends. mail this return to: MUSKEGON CITY INCOME TAX DEPARTMENT,
If you are a shareholder in a corporation that has elected to file under P.O. BOX 29, MUSKEGON, MI 49443-0029. For direct electronic
Subchapter S of the Internal Revenue Code, you are not required to report withdrawal, mark pay tax due, line 14b, and complete lines 14c, d, e and f.
any distributed income from Federal Schedule K-1 lines 1 through 11, nor Withdrawal date (line 14f) must be no later than the due date of the return.
may you deduct your share of any loss or other deductions distributed by If no date is entered, the default withdrawal date will be the date
the corporation. processed.
Attach copies of Federal Schedule K-1 for all S corporations listed on Line 10—Overpayment
page two of your Federal Schedule E regardless of whether or not the If your total payments and credits on line 8 are more than Muskegon
S corporation made distributions. Tax on line 7, you have overpaid your tax for 2019.
Line 8—Income from estates and/or trusts. 1. If you want your overpayment to be HELD and applied to your 2020
Enter on line 8 all income from estates and/or trusts reported on your estimated tax, enter the overpayment on line 11.
Federal Schedule E, page two. Income from an estate or trust is taxable 2. If you want to donate your refund select only 1 of the programs on
to a Muskegon resident regardless of the location of the estate or trust, or line 12. Donation information is on the cover page of this booklet.
the location of property it may own. 3. If you want your overpayment MAILED to you, enter the overpayment
Attach a copy of Federal Schedule E, page two. on line 13.
Line 9—Distributions from profit sharing plans, premature IRA 4. If you want your overpayment REFUNDED VIA DIRECT DEPOSIT,
distributions. enter the overpayment on line 13and complete the routing number,
Enter on line 9 all early pension and profit sharing withdrawals and/or type of account and account number boxes provided in line 14.
distributions subject to the 10% federal penalty. Also report on line 9 Refunds or credits of less than one dollar ($1.00) cannot be made.
premature IRA distributions subject to the 10% federal penalty.
Line 10—Other income. NOTICE
Enter on line 10 all other income reported on your federal return and These instructions are an interpretation of the Muskegon City Income
not specifically exempted by the Muskegon City Income Tax Ordinance. Tax Ordinance. If any discrepancy exists between the instructions and
Examples of the types of income reported on line 10 are gambling the Ordinance, the Ordinance prevails.
winnings, alimony received and miscellaneous income.
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