Lovely RITA

I attended a seminar that was not about a female parking attendant in a Beatles song but it was an income tax seminar. RITA stands for Regional Income Tax Agency who have been collecting income taxes since 1971 and currently has 185 municipalities in the state of Ohio. Here are the highlights:

Some local Cleveland area changes:

• Mayfield Village: Tax rate increases to 2% with a tax credit of 100% up to 2%, effective 7/1/2010.
• Beachwood: Tax rate increases to 2% with a tax credit of 100% up to 2%, effective 1/1/2011.
• Cleveland Heights: Joins RITA on 7/1/2011.
• 2010-2011 Tax Table

Two main forms:
Individual Form 37 | Instructions
Net Profit Form 27 | Instructions

Estimated Taxes
Due April 30, June 30, September 30, and January 31

Safe Harbor Provisions for Underpayment Penalty

• 90% of current year liability or
• 100% of preceding tax year liability

How to verify Estimated Taxes

• Contact a RITA agent either by phone or fax

2010 RITA return Due Dates

• April 18, 2011
• Request for extension: April 18, 2011
• Latest due date: October 31, 2011
• Federal Form 4868 is acceptable to extended RITA tax return due date

Non-Filer Assessment Process (FTI)

• Send Audit Notice
• Send Tax Assessment Notice
• Three incentives to file a return: (1) Tax Credit (2) Penalty Abatement and (3) Payment Plan

Taxpayers can use RITA Form 37B if

• Did not move
• Lived in a 100% credit city
• Only W-2 wages
• Wish to claim an exemption
• No taxable income
• Military income
• Under 18
• Retired
• Moved out of RITA
• Deceased
• Filing a Joint Return with his/her spouse

Since there is no tax advantage to filing separate tax returns, the recommendation for couples is to file together.

Schedule J

• Offsets
• Columns 1 and 2
• Columns 3, 4 and 5
• Line 31 can not be less than zero
• Column 1 – income earned in residence city
• Column 2 – income earned in township
• Column 3 – income earned in another RITA municipality
• Column 4 – income earned in another RITA municipality
• Column 5 – income earned in a non-RITA municipality

Amended Returns have a three year deadline from the original due date of the tax return. Exception is if the taxpayer is under audit.