How to File Your Arkansas Tax Return for 2015

Filing your Arkansas state tax return for 2015 is essential in staying compliant with state tax laws. Whether you’re a first-time filer or have filed before, understanding the process can help you easily navigate the necessary steps. Arkansas requires all residents who meet certain income thresholds to file a state tax return, and even if you don’t owe taxes, you may still want to file to claim a refund.

In this guide, we'll show you the most critical parts of filing your taxes, like which forms to use, what's new in tax legislation for 2015, how to file, and how to pay. This complete guide has all the information you need to submit your Arkansas tax return correctly and on time, whether single, married, or self-employed.

Who Needs to File an Arkansas Tax Return for 2015

In Arkansas, residents and nonresidents who earn income must file an income tax return. However, the necessity of filing depends on your filing status and income level. Here’s a breakdown of who needs to file a return for 2015:

Income Thresholds for Arkansas Tax Filing

People in Arkansas have to file a tax return if their total income is equal to or more than specific levels. These income restrictions are variable depending on how you file. If your income is below the limits for your status, you might not have to file. But remember that you must file a claim if you owe money.

Here are the income thresholds for various filing statuses:

• Single: $11,644
• Head of Household (1 or no dependents): $16,554
• Head of Household (2 or more dependents): $19,734
• Married Filing Joint (1 or no dependents): $19,636
• Married Filing Joint (2 or more dependents): $23,632
• Married Filing Separately: $3,999
• Qualifying Widow(er) (1 or no dependents): $16,554
• Qualifying Widow(er) (2 or more dependents): $19,734

You must not file a return if your gross income is below your status threshold. However, if you had any state taxes withheld, you should file to get a refund.

Special Cases for Filing

• Nonresidents and Part-Year Residents: If you lived in Arkansas for part of the year or earned income from Arkansas sources, you must file an Arkansas tax return, regardless of the income earned. Nonresidents must use Form AR1000NR and allocate income earned in Arkansas.
• Self-Employed and Sole Proprietors: If you are self-employed or a sole proprietor, even if your income is below the filing threshold, you may still need to file to report business income. This ensures that your taxes on earnings are paid, and you can also deduct business expenses. 

Essential Changes in Arkansas Tax Laws for 2015

The Arkansas tax landscape saw several significant changes 2015 that affected individual and business taxpayers. These changes, aimed at reducing tax burdens and simplifying the filing process, may impact the amount of tax you owe or the refund you can expect. Here are some of the key tax law updates for 2015:

Capital Gains Exemption (Act 1173 of 2015)

For 2015, Arkansas implemented a new capital gains exemption that affects how capital gains are taxed. The exemption provides relief to taxpayers by reducing the taxable amount of capital gains income:

• For gains realized from January 1, 2015, to January 31, 2015, 50% of net capital gains are exempt from tax.
• For gains realized from February 1, 2015, to December 31, 2015, 45% of net capital gains are exempt from tax.
• For tax years starting from 2014 onward, 100% of net capital gains above $10,000,000 are exempt from tax.

This change primarily benefits investors, significantly reducing the taxes owed on capital gains.

Tax Bracket Reduction (Act 22 of 2015)

Arkansas cut income tax brackets by 0.1% for people who made less than $21,100 to lower their tax bills. Because of this little drop in tax rates, many people in Arkansas had a reduced effective tax rate for the 2015 tax year. The cut wasn't massive, but it helped people with low and moderate incomes.

New Setoff for Debts (Act 531 of 2015)

Beginning in July 2015, Arkansas introduced a new setoff provision that allows certain debts to be deducted from income tax refunds. If you owe a debt to the Arkansas Highway and Transportation Department, the state can use your tax refund to satisfy it. This change is essential, especially if you expect a refund and have outstanding debts to the state.

New Check-Off for Arkansas Game and Fish Foundation (Act 399 of 2015)

For the 2015 tax year, Arkansas introduced a new charitable check-off on your state tax return. Taxpayers can donate all or part of their tax refund to the Arkansas Game and Fish Foundation. The previous check-off for the U.S. Olympic Committee Program was eliminated.

This check-off allows taxpayers to contribute to conservation efforts and wildlife management in Arkansas, providing an easy way to support environmental causes directly from your tax refund.

Increase in Standard Deduction (Act 1488 of 2013)

Starting with the 2015 tax year, Arkansas increased its standard deduction, making it easier for taxpayers to reduce their taxable income. The standard deduction was raised to:

• $2,200 for individual filers (up from $2,000)
• $4,400 for married couples filing jointly (up from $4,000)

This increase benefits taxpayers who do not itemize deductions, as it automatically provides a higher deduction from their taxable income.

Changes in Tax Credits and Deductions

Arkansas also adjusted several tax credits and deductions in 2015, providing opportunities for taxpayers to lower their overall tax liability:

• Itemized Deductions: Taxpayers can still claim itemized deductions for mortgage interest, medical expenses (above a certain threshold), and charitable contributions. However, it is worth asking whether the standard deduction might be more beneficial.
• Charitable Donations: Contributions to qualified charitable organizations can be deducted. In 2015, Arkansas expanded the scope of donations that qualify for deductions, making it easier for individuals to reduce their taxable income through charitable giving. 

Common Schedules and Attachments

In addition to the primary forms, you may need to complete and attach the following schedules, depending on your financial situation:

Form AR1000ADJ: Schedule of Adjustments

• Use this form to report any adjustments to your income, such as retirement plan contributions or student loan interest.
• If you qualify for any deductions not automatically applied on the main tax form, you’ll list them here.

Form AR1000D: Capital Gains Schedule

• If you have capital gains (from the sale of investments, property, etc.), you must report them using this schedule.
• Including any net gains or losses from sales is essential, as they may impact your tax liability.

Form AR1000TC: Schedule of Tax Credits

• Arkansas offers several tax credits, such as the credit for charitable donations, mortgage interest, or educational expenses. If you qualify for any of these credits, you must use this schedule to apply them.

Form AR3: Itemized Deduction Schedule

• You'll need to complete this form if you itemize deductions instead of taking the standard deduction. You can claim deductions for mortgage interest, medical expenses, charitable donations, and other allowable expenses.

Form AR1000-CO: Check-Off Contributions Schedule

• If you wish to contribute to a specific charitable cause, such as the Arkansas Game and Fish Foundation, you will use this form to designate a portion of your refund.

Form ARDD: Direct Deposit Form

• Please complete this form with your bank account number and routing number to ensure your refund is deposited directly into your account.

Form AR1055: Request for Extension of Time to File

• If you need more time to file your tax return, you can use this form to request an extension. Remember that an extension only extends your time to file, not your time to pay any taxes owed.

Where to Find Official Arkansas Tax Forms

All Arkansas tax forms can be accessed through the following channels:

• Online: The Arkansas Department of Finance and Administration (DFA) website offers complete forms and instructions at www.arkansas.gov/incometax.
• County Revenue Offices: You can also pick up physical copies of forms at your local county revenue office.
• Local Libraries: Many public libraries have copies of the forms for residents.
• Tax Hotline: If you have trouble finding the forms or need help understanding them, call the Arkansas DFA’s Individual Income Tax Hotline at (501) 682-1100 or (800) 882-9275.

Make sure to download the latest version of the forms directly from the official Arkansas website. Using outdated forms may delay your return or cause errors that could result in penalties.

Step-by-Step Instructions to Complete Your Arkansas Tax Return

Filing your Arkansas tax return might seem daunting, but breaking it down into simple steps can help make the process smoother. Follow these clear instructions to complete your tax return accurately and on time.

Step 1: Gather Necessary Documents

Before you start filling out your Arkansas tax return, gather the following documents to ensure you have everything you need:

• W-2 Forms: These show the income you earned from your employer(s) and the taxes already withheld.
• 1099 Forms: If you worked as an independent contractor or received other types of income (interest, dividends, retirement distributions), these forms will provide the necessary information.
• Receipts for Deductible Expenses: Collect receipts for any deductible expenses like medical costs, charitable donations, or business expenses (for self-employed individuals).
• Previous Year’s Tax Return: Your last year’s tax return can help you compare income and deductions.
• Bank Account Information: If you want your refund deposited directly into your bank account, have your routing and account numbers ready.

Step 2: Complete Your Tax Form (AR1000F or AR1000NR)

Once you have your documents, it’s time to fill out the appropriate form.

• For Full-Year Residents: Complete Form AR1000F, which includes sections for personal information, income reporting, tax credits, deductions, and calculations.
• For non-residents or Part-Year Residents: Completing Form AR1000NR requires you to allocate your income between Arkansas and other states. Attach a copy of your federal return, as required for nonresidents.

Here’s a breakdown of the key sections of these forms:

• Personal Information: Enter your full name, Social Security number, and filing status (single, married, etc.).
• Income Reporting: Report all sources of income, including wages, interest, dividends, retirement distributions, and self-employment earnings. List your income from Arkansas sources if you’re filing as a nonresident or part-year resident.
• Adjustments to Income: If you have deductible expenses like retirement contributions or student loan interest, report them here.
• Deductions: You can take the standard deduction ($2,200 for individuals, $4,400 for married couples) or itemize deductions if they exceed the standard deduction.
• Tax Computation: Use the tax table to calculate your tax liability based on your taxable income.
• Tax Credits: Apply any tax credits you are eligible for, such as charitable donations or educational expenses.

Step 3: Determine Your Refund or Tax Due

Once you’ve filled out the required sections, calculate whether you’ll receive a refund or owe additional taxes:

• Refund: You'll receive a refund if you overpaid your taxes through withholding or estimated payments. If you opted for direct deposit, the refund will arrive faster.
• Amount Due: If you owe taxes, pay by the due date (April 15, 2016) to avoid penalties and interest. You can pay online, by check, or using a credit card.

Step 4: Sign and Review Your Return

Before submitting your return, double-check all the information for accuracy:

• Ensure that all Social Security numbers and income amounts are correct.
• Review your bank account details if you’re opting for direct deposit.
• Verify that all necessary documents (W-2, 1099, etc.) are attached.

Finally, sign your return. If you’re filing jointly, both spouses must sign the return.

Step 5: Submit Your Return

After reviewing your tax return, you can e-file or file a paper return.

• E-filing is the fastest and most accurate way to submit your return. You can file online through a tax professional, tax software, or the Free File Alliance (if eligible).
• Paper Filing: If you prefer to file a paper return, mail it to the correct address. You’ll need to include all supporting forms, schedules, and documentation. Use the correct mailing address for your filing situation (refund, payment due, etc.).

Common Mistakes to Avoid:

• Not signing your return: An unsigned return will be rejected, delaying your refund or processing.
• Math errors: Double-check calculations to avoid underpayment or overpayment.
• Missing documents: Ensure all necessary forms (W-2s, 1099s) are included.
• Incorrect bank account details: Mistakes here can delay your refund.
• Wrong filing status: To avoid issues, verify that you’re using the correct status (single, married, etc.). 

How to File Your Arkansas Tax Return: E-Filing vs. Paper Filing

When submitting your Arkansas tax return, you have two primary options: e-filing and paper filing. Each method has advantages, so understanding the differences can help you decide which option is best. Below is an overview of both filing methods, including payment instructions and tips on how to file efficiently.

E-Filing: The Fastest and Most Accurate Option

E-filing is the preferred method for submitting your Arkansas tax return due to its speed and accuracy. When you file your taxes online, the system automatically checks for errors, helping you avoid common mistakes like missing forms or incorrect math. Furthermore, e-filing ensures your tax return is processed quickly, typically within 10 days. Here's how to get started with e-filing:

• Free E-Filing Options: Arkansas participates in the Free File Alliance, which allows eligible taxpayers to file their taxes for free. You can access free tax preparation software to guide you through the process if you meet specific income, age, or military status criteria.
• E-Filing Systems: You can e-file through tax preparation software, with some offering integration with QuickBooks for small business owners and sole proprietors who need to report business income. Additionally, you can work with a tax professional to e-file your return for added assistance.
• Direct Deposit for Refunds: If you're eligible for a refund, e-filing allows you to choose direct deposit for the fastest processing. Enter your bank account details correctly to ensure the refund is sent directly to your savings account.
• Paying via E-Filing: If you owe taxes, you can use e-filing to set up a payment plan or make a one-time payment. You can pay directly from your bank account, by credit card, or by using payment instructions provided through the Arkansas Taxpayer Access Point (ATAP).

Paper Filing: A Traditional Method

While e-filing is faster and more convenient, some taxpayers may prefer or need to file a paper return. If you choose to go this route, here are the steps to ensure your filing is correct:

• Choosing the Right Forms: Ensure you use the correct forms for your filing status. Full-year residents should use Form AR1000F, while nonresidents or part-year residents should use Form AR1000NR.
• Include All Necessary Documents: Paper filers must attach all required documents, such as W-2s, 1099s, and receipts for any deductions (e.g., mortgage interest or charitable donations). Be sure to include all documents to avoid delays.
• Mailing Your Return: After completing it, send it to the correct Arkansas address. If you are due a refund, mail it to the Arkansas State Income Tax.
  
  Arkansas State Income Tax
  P.O. Box 1000
  Little Rock, AR 72203-1000

If you owe taxes, use the P.O. Box 2144 address for tax payments.

How to Pay Your Arkansas Income Tax

Once you’ve completed your Arkansas tax return, the next step is ensuring you make any necessary payments on time. Paying your taxes by the deadline helps you avoid penalties and interest, providing a smooth filing process. Here’s a breakdown of Arkansas taxpayers' payment instructions and options.

Payment Options

If you owe taxes, you have several methods to choose from to make your payment. Understanding the available payment options is essential for deciding which method is most convenient for you:

• Online Payments (ATAP): The Arkansas Taxpayer Access Point (ATAP) is the fastest payment method. This portal lets you pay directly from your bank account or credit card. You can also schedule payments in advance to meet the filing deadline. This method benefits those who want to avoid delays and pay electronically.
• Credit Card Payments: If you prefer to pay by credit card, you can use services like Official Payments. However, the vendor will charge a convenience fee for this service. You can pay by visiting www.officialpayments.com or calling toll-free (800) 272-9829.
• Check or Money Order: If you send a check or money order, make it payable to the Department of Finance and Administration (DFA). In the memo line, include your Social Security number and the words "2015 AR1000F" or "2015 AR1000NR" to ensure the payment is correctly credited to your account.

Payment Deadlines and Penalties

Your 2015 Arkansas income tax is due by April 15, 2016. Even if you’ve filed for an extension to submit your return, any taxes owed must still be paid by this date to avoid penalties and interest.

• Failure to Pay Penalty: If you don’t pay your taxes by the deadline, you will face a penalty of 1% per month of the unpaid amount, with a maximum penalty of 10%.
• Interest: In addition to the penalty, you will be charged interest on unpaid taxes. The interest rate is determined annually and compounded daily.

To avoid penalties and interest, planning and paying the amount owed by April 15 is crucial. If you cannot pay the full amount, you can request a payment plan to pay in installments.

Payment Plan Options

You may qualify for a payment plan if you cannot afford to pay your Arkansas taxes in full by the deadline. The plan allows you to make monthly payments toward your balance over time. The Arkansas Department of Finance and Administration offers a payment plan application, which you can access online or request by calling their tax hotline.

To apply for a payment plan, you’ll need to provide the following:

• Your income information (including any financial records that show you are unable to pay the full amount)
• Your address and contact details
• The amount you can afford to pay monthly

Once your payment plan is approved, you’ll receive confirmation from the state, and you can start making regular payments until your debt is fully paid off.

Making Payments for Businesses

You will use the exact payment instructions for self-employed individuals or sole proprietors who owe business taxes. However, if you’re making quarterly estimated tax payments (required if you expect to owe $1,000 or more in taxes), you must follow the guidelines for making those payments throughout the year. You can pay these estimated taxes online or via mail.

Tracking Your Refund or Balance Due

After you file your Arkansas tax return, you should keep an eye on the status of your refund or any money you still owe. Monitoring your refund or balance owed is crucial to ensure accurate and timely filing of your taxes. You can easily keep track of your rebate, make changes if needed, and handle any payments that are still due below. 

Tracking Your Arkansas Tax Refund

If you are due a refund, it’s essential to know how to track its progress. Arkansas provides an online tool that allows you to check the status of your refund in real time.

• Online Tracking: You can use the Arkansas Department of Finance and Administration’s website to check your refund status. Simply visit the "Where's My Refund?" page, and enter the following details:
  
  • Your Social Security number
  • The exact amount of your refund
• Once you’ve entered the required information, the website will show whether your refund has been processed or if any issues need attention.

Frequently Asked Questions (FAQs)

What if I missed the filing deadline for my Arkansas tax return?

If you missed the April 15 deadline for filing your Arkansas tax return, it's important to file as soon as possible to minimize penalties and interest. The penalty for failure to file is 5% of the unpaid monthly tax, up to a maximum of 35%. If you owe taxes, the IRS may also apply additional penalties.

Can I e-file my Arkansas tax return for free?

Arkansas offers free e-filing options through the Free File Alliance for eligible taxpayers based on income, age, or military status. You can also use commercial tax software for tax preparation if you don’t qualify for free filing.

What are some standard tax deductions that Arkansas taxpayers miss?

Some commonly overlooked tax deductions in Arkansas include charitable donations, mortgage interest, and deductible expenses related to business income for self-employed individuals. Keep track of receipts and documents to claim all the deductions you’re entitled to.

How do I request an extension to file my Arkansas tax return?

If you need more time to file, you can submit Form AR-1055 to request an extension. Remember that an extension gives you more time to file, but it does not extend the deadline for payment. Any taxes owed must still be paid by the original filing deadline (April 15).

What should I do if I made an error on my Arkansas federal income tax return?

If you discover an error after filing, you can file an amended return using the form you originally filed (AR1000F or AR1000NR). Select the “AMENDED RETURN” box, correct the information, and explain the changes.

How does the Internal Revenue Service (IRS) affect my Arkansas tax filing?

The IRS impacts your Arkansas tax filing since Arkansas uses your federal tax return to determine your adjusted gross income (AGI). Your IRS Form 1040 information helps the Arkansas Department of Finance and Administration calculate your state tax liability. Ensure your federal return is complete and accurate to avoid issues with your Arkansas tax filing.

How should I prepare my Arkansas tax return using my adjusted gross income?

To prepare your Arkansas tax return, you must start with your federal adjusted gross income (AGI) from your IRS Form 1040. This number is the starting point for calculating your Arkansas taxable income. Arkansas may require specific adjustments to your federal AGI, so review both state and federal guidelines to ensure accurate reporting.