Transcript Slide 1
What's New in 2010?
What are we going to cover:
New In-scope Changes
Economic Recovery Act
New tax provisions in 2010
Extenders
Expiring Tax Benefits
Other items affecting tax preparation
in 2010
NTTC TRAINING 2010
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IRS In-scope Changes
for VITA-TCE
Schedule C – up to $10,000 expenses
– same rules as Schedule CEZ (no
losses, no employees, no inventory)
Schedule K-1 - royalties
Two new “on-line” training modules
and tests:
HSA – Health Savings Accounts
COD – Cancellation of Debt
NTTC TRAINING 2010
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In-Scope/Competencies being Tested
Basic – 30 questions – two full
returns and one completed return to
be QR (18 Competencies Tested)
10 on Credits (EIC, CTC, ACTC, MWPC);
5 on QR;
7 on Dependency/Filing Status;
8 on various issues including std ded, adjustments,
tax due, purchase savings bonds, taxable social
security
NTTC TRAINING 2010
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In-Scope/Competencies being Tested
(continued)
Intermediate – 20 questions – two full returns
(11 Competencies Tested)
5 on Itemized Ded; 4 on Sch C/CEZ; 4 on Educ Credit
and Adjustments;
7 on energy credit, taxable pensions, and payments
Advanced – 15 questions – one full return
(8 Competencies Tested)
8 on Sch D and sale of home;
7 on taxable pensions, foreign tax, and amended
returns
NTTC TRAINING 2010
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Economic Recovery Payment
Some SS recipients will receive $250
ERP in 2010
If did not receive in 2009 when first eligible,
i.e. social security, ssi, railroad retirement,
or veterans disability benefits in November
2008, December 2008, or January 2009
Any Making Work Pay Credit will be
reduced in 2010 by this payment
NTTC TRAINING 2010
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Estate Tax,
Basis & Holding Period
Economic Growth and Tax Relief Reconciliation
Act of 2001 (EGTRRA) repealed estate tax after
December 31, 2009 and before January 1,
2011
Basis of assets inherited from decedent dying
in 2010 is the lesser of the decedent’s adjusted
basis or fair market value
Basis is treated as a gift
Automatic “more than one year” or long term
holding period does not apply
Date of acquisition will be same as decedents’
NTTC TRAINING 2010
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Other ARRA Provisions in 2010
First time homebuyer credit extended closing
on purchase of home to September 30, 2010, if
purchased before April 30, 2010; eligible for up
to $8,000 credit
New motor vehicle purchased in 2009 (after
Feb 16, 2009 and before Jan 1, 2010) but did
not pay sales taxes until 2010 – are eligible to
deduct the amount paid in 2010
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New Provisions in 2010
Adoption Tax Credit of 2010 – made fully
refundable in 2010
Qualified expenses up to $13,170 for both special
and non-special needs adoptions
Affordable Care Act of 2010 – expands
exception to exclude forgiven state loans from
income of certain qualified medical providers
Decrease Personal Casualty and Theft Losses –
limited to losses over $100 instead of $500 –
this is in addition to the 10% of AGI limit
NTTC TRAINING 2010
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New or Unchanged Provisions in
2010
Investment income for children remains at $1900;
Standard deduction for Head of Household increases to $8400
(from $8350) – all other standard deductions remain the
same:
Single - $5,700
Joint - $11,400
HOH - $8,400
Exemption amount remains the same in 2010 - $3,650;
Standard Mileage Rates – for 2010
Business – 50 cents per mile
Medical and moving – 16.5 cents per mile
Charity – 14 cents per mile
NTTC TRAINING 2010
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Earned Income Credit
Amount of credit increases in 2010:
One qualifying child – maximum $3050
Two qualifying children – maximum $5036
Three qualifying children – maximum $5666
No qualifying children – maximum $457
Earned income amount increases in 2010:
$35,535
$40,363
$43,352
$13,460
(joint
(joint
(joint
(joint
$40,545)
$45,373)
$48,362)
$18,470)
One qualifying child
Two qualifying children
Three qualifying children
No qualifying children
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Other changes or items
Increases in MAGI for contributions to IRA
Refund options for purchase of Savings Bonds
For 2010, in addition to direct deposits can use refund to
purchase savings bonds
Can purchase up to three I bonds registrations,
Purchase for themselves, beneficiaries, or co-owners, or
other persons, other than themselves;
Use Form 8888
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Expiring Tax Benefits
(subject to possible extenders)
Waiver of Minimum Required Distributions from IRAs’ and
defined benefit plans;
Exclusion of $2400 of unemployment compensation from
income;
Tax free distributions to charity from IRA;
Deduction of educator’s expenses;
Tuition and Fees Deduction from AGI;
Extra $3000 IRA contribution for bankrupt companies;
Increase of Standard Deduction for real estate taxes and disaster
losses;
Increase in Itemized Deduction or Standard Deduction for sales
taxes of purchase of new motor vehicle;
Increase in Itemized Deduction for state and local sales taxes;
Certain tax benefits for Midwestern disaster areas
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QUESTIONS?
COMMENTS?
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