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Form 712

Form 712

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Instructions and help about form 712

IRS form 8697 interest computation under the look back method for completed long-term contracts the vast majority of taxpayers will probably never see this tax form or much less file it and those who do file it will probably be using the services of their paid tax return preparer in order to do so to calculate interest you can use one of two methods which are covered in Parts one and two part one covers the regular method and then in part two there is the simplified marginal impact method now taxpayers generally will use part one or part two they do not use both in part two you would use the simplified marginal impact method to simplify your calculations so basically your prior year hypothetical underpayments or overpayments are calculated using an assumed marginal tax rate this tax rate is generally the highest statutory rate in effect for the prior year either for individuals or corporations so this method eliminates the need to recalculate your tax liability based on actual contract

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