Transcript Document

SaveFirst 2013-2014
Campus Fellow Training
Intermediate and Advanced
Intermediate Training
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1) Basic Training Refresher
2) Alimony
3) State Tax Refund
4) Business Income
5) Retirement Income (with taxable amount)
6) Adjustments to Income
7) Itemized Deductions
8) Education Credit
9) Foreign Tax Credit
10) Residential Energy Credit
Basic Scope Refresher
• Preliminary Interview
• Review I/I Form and collect forms
• Verify photo IDs and SS cards
• Determine personal exemption, dependency
exemptions and filing status
• Tabs A, B and C in Pub 4012
Basic Scope Refresher
• Preparing the Return in TaxWise
• Complete the “Interview” through the
dependents section
• Fill out “Main Info” and “Dependents” forms(s)
• Complete Form 1040
• Complete AL-40
• Complete Gen Use, Gen Disclosure and Prep Use
• Review the return
Forms of Income
• Wages: W-2 (line 7)
• Interest: 1099-INT (line 8)
• Dividends: 1099-DIV (line 9)
• Unemployment: 1099-G (line 19)
• Social Security Benefits: SSA-1099 (line 20)
• Gambling Winnings: W2-G (line 21)
• Prize/Award Money: 1099-MISC (line 21)
Credits
• Child and Dependent Care Expenses Credit
• Link: Line 48  2441
• Retirement Savings Contribution Credit
• Link: Line 50  8880
• Child Tax Credit
• $1,000 max. per child (TW calculates, line 51)
• Credit for the Elderly and Disabled
• Link: Line 53  Sch R
• Earned Income Credit
• Fill out Sch EIC and Sch EIC Wkt
• Additional Child Tax Credit
• Refundable portion of CTC (TW calculates, line 65)
Savings Bond Purchases
1) Add and complete Form 8888
2) Enter the banking information
• If a taxpayer invests in savings bonds, ONLY fill out
the routing and account numbers on the Form 8888.
• If a taxpayer does not invest in savings bonds, fill
out the routing and account numbers on the Main
Info form and on Form 1040, line 74.
3) Fill out the SNWL Entry Form
• You must fill out all blanks; be sure to complete both
sides of the form!
• Attach a copy of the 8888 from TaxWise to the
SNWL entry form.
Alabama Return
• Personal exemptions
• Taxpayers receive a personal exemption if AL even if
they CAN be claimed as a dependent by someone else.
• Dependents
• Taxpayer provided over 50% of his/her support and is
related to the taxpayer by blood
• NOT cousins, friends or foster children
• Filing status
• Taxpayers can only claim Head of Family if they are
unmarried/legally separated at the end of the year
• Non-taxable income
• Unemployment and Social Security
Basic Training Refresher
• Please review the Basic Training Slides at
www.impactalabama.org/taxprep
TaxWise Practice: Kent Exercise
• Review I/I and Notes
• Line 7: Wages
• Line 8: Interest
• Skip seller-financed mortgage for now
• Line 9: Dividends
• Skip foreign tax paid and capital gain distributions for now
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Line 19: Unemployment
Line 20: Social Security
Line 21: Other Income
Line 48: Child and Dependent Care
Line 64a: EIC
Intermediate Training
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1) Basic Training Refresher
2) Alimony
3) State Tax Refund
4) Business Income
5) Retirement Income (with taxable amount)
6) Adjustments to Income
7) Itemized Deductions
8) Education Credit
9) Foreign Tax Credit
10) Residential Energy Credit
Alimony
• A payment to or for a spouse or former
spouse under a separation or divorce
instrument
• Person RECEIVING the alimony must
report it as income on line 11
• Person PAYING the alimony can subtract it
as an adjustment on line 31
Alimony
• May include:
• Medical bills, housing costs and other expenses
• Does NOT include:
• Child support or voluntary payments outside
Reporting Alimony Income
• Line 11  enter EXACT amount of alimony
received for the YEAR
• No worksheet for reporting alimony
income
• Do NOT need Social Security number of the
person who paid the alimony
Intermediate Training
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1) Basic Training Refresher
2) Alimony
3) State Tax Refund
4) Business Income
5) Retirement Income (with taxable amount)
6) Adjustments to Income
7) Itemized Deductions
8) Education Credit
9) Foreign Tax Credit
10) Residential Energy Credit
State Tax Refund
• Taxpayers who receive a refund of state or
local income taxes may receive Form 1099-G
listing their refund in box 2.
• NOT everyone must include their state tax
refund as taxable income.
State Tax Refund
• A portion (or all) of 2012 state tax refund
(usually Alabama) may be taxable and need
to be reported
• Conditions in which 2012 state tax refund
is taxable:
• Received a refund on a state return (Alabama)
• Itemized Deductions in 2012 (Federal) AND
• Deducted state income tax instead of state sales
tax when itemizing deductions (Federal)
2012 State Tax Refund
• Answer question in Box under line 9.
• If NO, there are no additional forms.
• If YES, Link: Line 10  St Tax Refund
• Complete the St Tax Refund Worksheet with
information from the 2012 return.
Info Needed from 2012 Return
• State refund amount
• Sch A, line 5a, income taxes
• Sch A, line 5b, general sales tax
• Total itemized deductions amount
• Form 1040, line 40
• Filing status
• Taxable income amount
• Form 1040, line 43
St Tax Refund in TaxWise
Enter in the amounts:
- Line 1: enter AL and state refund amount
- Line 2: income taxes from Sch A, line 5a
- Line 2: general sales tax from Sch A, line 5b
St Tax Refund in TaxWise
Enter in the amounts:
- Line 6: total
itemized deductions
- Line 7: filing status
- Line 12: taxable
income amount
St Tax Refund
• If a taxpayer does not have a copy of the
previous year’s return, Link: Line 10 
Scratch Pad and enter the full amount of
the state tax refund.
Intermediate Training
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1) Basic Training Refresher
2) Alimony
3) State Tax Refund
4) Business Income
5) Retirement Income (with taxable amount)
6) Adjustments to Income
7) Itemized Deductions
8) Education Credit
9) Foreign Tax Credit
10) Residential Energy Credit
Business Income
• Income from personal business (sole
proprietor) or independent contractor
• Income can be reported on:
• 1099-MISC (with an amount in Box 7,
Nonemployee Compensation)
• W-2 (with Statutory Employee checked in Box
13)
• 1099-K (Merchant Card and Third Party
Payments)
• Taxpayer’s books and personal records
• Link: Line 12  Sch C-EZ or Sch C
Form 1099-MISC
Form W-2
Form 1099-K
Business Income
• Having a part-time business (even in
addition to another job) may still be selfemployment income and need to be
reported on line 12
• Remember: Business income that was not
reported on Form W-2, 1099-MISC or
1099-K still needs to be reported as cash
payments!
Example
Andy works as an independent contractor
for a painting company. He received a 1099MISC from the company that shows he made
$10,000. He also received $2,000 in cash
payments form a few different people for the
work he completed, but he did not receive a
1099-MISC for the $2,000.
What is Andy’s total business income that
needs to be reported on Line 12?
Example - Answer
• Andy must include the amounts from both
the 1099-MISC and cash payments. His
total business income that must be
reported is $12,000.
Business Income vs Other Income
• Business Income
• An activity qualifies as a business if the primary
purpose for engaging in the activity is for income or
profit and the taxpayer is involved in the activity
with continuity and regularity
• Link: Line 12  Sch C or Sch C-EZ
• Other Income
• A sporadic activity or a hobby does not qualify as a
business
• Hobby: undertaken for pleasure during leisure time
(not for profit)
• Link: Line 21  multiple forms
Business Income Terms
• Business expenses: amounts that are ordinary
and necessary to carry on the business
• Cash method of accounting: reports all income
when received and deducts all expenses when
paid
• Inventory: the items the taxpayer buys or
makes for resale for others
• Depreciation: the cost of items that are
expected to last more than a year should be
spread over a period of years, rather than
deducted in the year of purchase
Business Income
• Conditions that must be met for us to file a
tax return with business income:
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Less than $5,000 of business expenses (Sch C-EZ)
Less than $10,000 of business expenses (Sch C)
Cash method of accounting
No inventory
Does not want to depreciate
Must report a profit: NO NET LOSS!
• Gross receipts – business expenses
• Only one business (if taxpayer owns a business)
• No employees
Sch C vs Sch C-EZ
• Sch C-EZ is just the simplified version of
the Sch C
• Use the Sch C-EZ if there are few business
expenses
• Less than $5,000
• Use the Sch C if there are a lot of business
expenses
• $5,000 to $10,000
Reporting Gross Receipts:
• 1) 1099-MISC, Box 7
• 2) Cash Payments
• 3) W-2, Statutory Employee
• 4) 1099-K
1099-MISC
• Income reported in Box 7 on 1099-MISC is
considered self-employment income and
should be reported on a Sch C or Sch C-EZ
• Link: Line 12  Sch C-EZ or Sch C
• Then, Link: Gross Receipts Line  1099-MISC
• DO NOT JUST ADD THE 1099-MISC!
Cash Payments
• CASH INCOME must also be reported on this line
by linking to a scratch pad and entering the
amount of cash income
• Link: Line 12  Sch C or Sch C-EZ  Gross
receipts line  Scratch Pad
W-2: Statutory Employee
• Make sure to check the Statutory employee
box on the W-2 in TaxWise:
• Then check the box at the bottom of the W2 in TaxWise in the Instructions:
• If you forget to check the box, the amount will
show up on Line 7 (wages, salaries and tips)!
W-2 Statutory Employee
• Link: Line 12  Sch C or Sch C-EZ  Gross
Receipts Line  Scratch Pad
1099-K
• Link: Line 12  Sch C or Sch C-EZ  Gross
Receipts Line  Scratch Pad
Deductible Business Expenses
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Pub 4012, F-1 through F-4
Advertising
Car and Truck Expenses
Commissions and Fees
Insurance
Other Interest
Legal and Professional Services
Office Expense
Rent or Lease – Vehicle, Machinery and Equipment
Repairs and Maintenance
Supplies
Taxes and Licenses
Travel/Meals and Entertainment
Utilities
Advertising
• Costs associated with promoting the
business through various means:
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Yellow pages
Newspapers
Magazines
Billboards
Racing sponsors
Television spots
Car & Truck Expenses
• A taxpayer who uses a car/truck in a
business may be able to deduct the costs of
operating and maintaining the vehicle
• Vehicle expenses are calculated using the
standard mileage rate
• Actual expenses include depreciation,
which is out of our scope
Commissions and Fees
• Are paid to both individuals and businesses
Insurance
• Insurance policies and coverages are
deductible for the business operation
• Property
• Automobile (business vehicles only)
• Malpractice
• Health insurance is NOT deductible
Other Interest
• Interest paid on operating loans, but not
mortgage interest
Legal and Professional Services
• Fees paid to professionals, such as
attorneys, accountants, appraisers and
engineers
Office Expense
• Supplies such as pens, paper, postage, etc.
Rent or Lease
• Rental fees for cars, trucks, vans,
machinery, equipment and other personal
property
• Leases of more than 30 days are out of
scope
Repairs and Maintenance
• Repairs on equipment, automobiles, office
space and buildings are some possible
expeditures
Supplies
• Costs for general operating supplies not
associated with the cost of goods sold
Taxes and Licenses
• Taxes and license fees paid in the operation
of the business:
• State and local sales taxes imposed on the
taxpayer as the seller of goods or services
• Real estate and personal property taxes
• Certain licenses and regulatory fees
Travel/Meals and
Entertainment
• Ordinary and necessary expenses of
traveling away from home for business
Utilities
• Normal electric, gas, water and telephone
• No deduction or personal expenses
Business Mileage Rates
• If used for business purposes, taxpayer can
receive a mileage deduction at the federal rate.
• Cannot deduct commuting miles.
• Cannot calculate depreciation (out of scope).
• For 2012, 55.5 cents per mile.
Sch C in TaxWise: Part I
• Link: Line 12  Sch C
Enter in the
business
information
Sch C in TaxWise: Part 1
• Line A: Enter the type of business
• Line B: Enter the Principal Business Code
• Help  Business 1099R and Country Codes
• Line C: Enter the business name, if no separate name, leave
blank
• Line D: Employer ID Number (EIN), if any
• Line E: Enter the Business Address
• Line F: Check accounting method (only cash accounting is in
VITA scope)
• Line G: Materially participate (on a regular, continuous and
substantial basis)
• Line H: Business acquired in 2012?
• Line I: Make payments that would require filing of Forms
1099?
• Line J: Will the business file all required Forms 1099?
Sch C in TaxWise: Part II (Income)
1: Gross receipts,
income reported on
1099-MISC with Box
7, W2 if the
“Statutory Employee”
box is checked, 1099K or cash payments
Sch C in TaxWise: Expenses
Enter in the
amounts for the
qualified business
expenses for lines
8-27
You need to fill out
a separate part of
the form for
car/truck
expenses and it
will carry over to
line 9
Sch C in TaxWise
• TaxWise calculates profit/loss!
Sch C in TaxWise: Part III (Cost
of Goods Sold)
• Out of Scope!
Sch C in TaxWise: Part IV (Vehicle)
Enter in the
amounts and
answer the
questions
TaxWise carries
over the mileage
expense for you to
line 9
Sch C in TaxWise: Part V (Other
Expenses)
• Part V: Includes all ordinary and necessary
expenses not deducted elsewhere on Sch C
Sch C-EZ in TaxWise
Enter in the
business
information
Sch C-EZ in TaxWise:
Income & Expenses
1: Gross receipts
income reported on
1099-MISC with Box
7, W2 if the “Statutory
Employee” box is
checked, 1099-K or
cash payments (just
like Sch C)
2: Total expenses
(Link to a Scratch
Pad)
3: TaxWise calculates
net profit
Sch C-EZ in TaxWise: Vehicle
Enter in the
amounts and
answer the
questions
You NEED to
enter in the
mileage expense
amount to Line 2
(Total expenses)
in Part II by
adding the
amount to the
Scratch Pad!
Self Employment Tax
• Must file Sch SE if self-employment earnings are
over $400
• Covers Social Security and Medicare taxes
• Complete Sch C or C-EZ first
• TaxWise automatically calculates the tax onto
Line 56
Record Keeping
• Good records will help the taxpayer do the
following:
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Monitor the progress of their business
Prepare their financial statements
Identify source of receipts
Keep track of deductible expenses
Prepare tax returns
Support items reported on tax returns
Record Keeping
• The law does not require any specific kind
of records. Taxpayers can choose any
system suited to their business.
• Supporting documents: purchases, sales
slips, paid bills, invoices, receipts, deposit
slips, cancelled checks, payroll, other
transactions usually found in accounting
journals and ledgers
Intermediate Training
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1) Basic Training Refresher
2) Alimony
3) State Tax Refund
4) Business Income
5) Retirement Income (with taxable amount)
6) Adjustments to Income
7) Itemized Deductions
8) Education Credit
9) Foreign Tax Credit
10) Residential Energy Credit
Types of Retirement Plans
• 1) Pension: series of payments for past
work
• 2) Annuity: series of payments from a
contract with a company, trust or individual
• 3) 401(k) Plan: employer contributes part
of the employee’s cash wages to a
retirement plan on a pre-tax basis (not
subject to income tax when deferred)
Retirement Forms
• Retirement income can be reported on:
• Form 1099-R, Distributions From Pensions,
Annuities, Retirement or Profit-Sharing Plans,
IRAs, Insurance Contracts, etc.
• Form CSA 1099-R, Statement of Annuity Paid
(civil service retirement payments)
• Form CSF-1099-R, Statement of Survivor
Annuity Paid
• Form RRB-1099R, Annuities or Pensions by the
Retirement Railroad Board
Form 1099-R: Taxable Amount Determined
• At this point, we are only going to prepare returns
with 1099-R Forms that already have the taxable
amount determined.
• Advanced Training: 1099-R with an empty Box 2a.
Lines 15/16:
Retirement
(Forms 1099-R)
Form 1099-R: Taxable Amount Determined
• If IRA Box is checked, link: Line 15a  1099R
• We can only prepare traditional IRA returns!
• If IRA Box is NOT checked, link: Line 16a  1099R
IRA/SEP/SIMPLE
• Individual Retirement Arrangements
• IRA distribution reported on Form 1099-R with
a check in Box 7
• Earnings generally accumulate tax free until
withdrawn
• Types:
• Traditional: Report on Line 15a
• Roth: Out of Scope (usually – discussed in
Advanced Training)
• SIMPLE: Out of Scope!
• SEP: Out of Scope!
Form 1099-R: IRA (Line 15a)
• Link: Line 15a  1099R
Form 1099-R: IRA (Line 15a)
Form 1099-R: Pension/Annuity (Line 16a)
• Link: Line 16a  1099R
Form 1099-R: Pension/Annuity (Line 16a)
Form CSA 1099-R
• Link: Line 16a  1099R
Form CSA-1099R
Railroad Retirement Plans
• RRB-1099
• Treated like SSA-1099
(social security
benefits)
• Line: 20a  1040 Wkt1
• RRB-1099R
• Treated like 1099-R
(pension)
• Line 16a  1099R
Form RRB 1099: Part 1
• Link: Line 20a  1040 Wkt 1
RRB-1099: Line 20a  1040 Wkt1
- Railroad tier 1: Enter total benefits from Box 5
- Medicare Parts B, C and D: Enter amount from Box 11
- Federal tax withheld: Enter amount from Box 10
RRB 1099-R: Part 2
• Link: Line 16a  1099R
RRB-1099-R: Line 16a  1099R
Line 1: Enter Total Gross
paid from Box 7
Click: Taxable amount not
Determined (discussed in
Advanced training)
Line 4: Enter Withholding from
Box 9
Line 7: Enter 7 for the code
Line 9b: Enter employee
contributions from Box 3
Click: Railroad retirement
Box 1, 2, 3 or Railroad Retirement?
• On all 1099-R Forms in TaxWise
• ONE OF THE MOST IMPORTANT BOXES TO
CORRECTLY CHECK IN TAXWISE!!
• DO NOT SKIP THIS FOR ANY 1099-R!
Defined Benefits & Defined Contributions
• Defined Benefits: Box 1
• Taxpayer receives a set amount each month for retirement
and is based on salary history and years which they worked
at a company.
• Defined Contributions:
• Taxpayer's retirement depends on the amount of
contributions made into an investment account and the
performance of those investments contributed.
• Examples: 401(k), 403(b), employee stock ownership plan,
profit-sharing plan.
Defined Benefits vs. Defined Contributions
• Defined Benefits Retirement Plans (Box 1) are
NOT taxable at the Alabama level.
• To find out if a retirement plan is Defined
Benefits or Defined Contributions
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Consult online list (www.impactalabama.org/taxprep)
Consult Site Coordinator Manual
Call the company that administers the plan
Call the Alabama Department of Revenue
Call the IRS
Hint: All retired civil servants (teachers, city employees,
soldiers, etc.) have Defined Benefits plans.
401(k) plans are NOT Defined Benefits.
Defined Benefits or Defined Contributions?
• You can also ask the taxpayer the following
questions to help you reach a decision:
 Do you receive the same amount every pay period? (If
yes  Defined Benefits) BOX 1
 Did your employer match your retirement
contributions? (If yes  Defined Contributions)
 Were your contributions placed into an investment
account? (If yes  Defined Contributions)
Box 1, 2, 3 or Railroad Retirement?
• On all 1099-R Forms in TaxWise
• ONE OF THE MOST IMPORTANT BOXES TO
CORRECTLY CHECK IN TAXWISE!!
• DO NOT SKIP THIS FOR ANY 1099-R!
Defined Benefits
RRB-1099R (Railroad retirement)
Defined Benefits Retirement Plans
FOR A DEFINED BENEFITS PLAN, CLICK BOX 1 ON
THE BOTTOM OF THE 1099-R IN TAXWISE!
Practice
Joe has been receiving his retirement
payments for several years and has received a
1099-R. When you ask him if he knows what
kind of plan it is, he says he has no idea but
he knows it is from his employment as a
teacher. Is this a defined benefits or defined
contributions plan?
Practice
Joe has been receiving his retirement payments
for several years and has received a 1099-R.
When you ask him if he knows what kind of plan
it is, he says he has no idea but he knows it is
from his employment as a teacher. Is this a
defined benefits or defined contributions plan?
Defined benefits plan – BOX 1
All civil servants will have a defined benefits plan.
Practice
Maria began receiving her retirement
payments this year and was issued a
1099-R. She tells you that this is being drawn
from an investment account that she would
contribute to and her former employer would
match that contribution. Is this a defined
benefits plan or defined contributions plan?
Practice
Maria began receiving her retirement payments this
year and was issued a 1099-R. She tells you that this
is being drawn from an investment account that she
would contribute to and her former employer would
match that contribution. Is this a defined benefits
plan or defined contributions plan?
Defined contributions plan
Practice
Charles has been receiving his retirement for
seven years. Every month, he receives $100.
Is this a defined benefits plan or defined
contributions plan?
Practice
Charles has been receiving his retirement for
seven years. Every month, he receives $100.
Is this a defined benefits plan or defined
contributions plan?
Defined benefits plan – BOX 1
1099-R Codes: Box 7
• 1: Early distribution, no known exception (in most cases, under
age 59 ½)
• 2: Early distribution, exception applies (under age 59 ½)
• 3: Disability
• 4: Death
• 5: Prohibited transaction
• 6: Section 1035 exchange (tax-free exchange of life insurance,
annuity or endowment contracts)
• 7: Normal distribution
• 8: Excess contributions
• 9: Cost of current life insurance protection
• A: May be eligible for 10 year tax option
• B: Designated Roth account distribution
• D: Excess contributions plus earnings/excess deferrals
• G: Direct rollover and rollover distribution
Rollover
• Tax-free distribution
• Code G will be in Box 7 of the 1099-R
• In TaxWise:
• Enter the top portion of the 1099-R as usual
• Make sure to enter Code G
• Fill out the Exclusion Worksheet
• Check the rollover box (Form 1040)
• Provide an explanation for the rollover
Rollover
Enter the amount
the taxpayer rolled
over
Check the
Box and
type F9
Provide an
explanation
Disability Pension Income
• Generally, taxpayers who retire on disability must
include all of their disability payments as income
• Not yet reached retirement age: Line 7
• Form W-2 (Link: Line 7  W2) OR
• Form 1099-R, Code 3 (Link: Line 7  1099R)
• Must click: Check if disability and taxpayer is disabled
• Reached retirement age: Line 16
• Form 1099-R (Link: Line 16  1099R)
Disability Pension Income
(Reported on 1099-R)
Incorrect Code on 1099-R
• If a taxpayer has an incorrect code on a 1099R, he/she should contact the retirement
company and get the issue resolved
• If the retirement company refuses, then the
taxpayer must enter the 1099-R as it is
written on the 1099-R
• If an additional IRA tax is calculated (due to an
early distribution)but it does not apply (because it
should actually be a normal distribution, then:
• Link: Line 58  5329 to correct the incorrect code
Form 5329
• Enter 12 as the exception number
• Enter the full amount of the retirement
distribution (line 1 of 1099-R) that was
incorrectly coded
• The amount of the additional tax that was
previously on Line 58 of the 1040 should then be
removed
TaxWise Practice – Kent Exercise
• Line 10: State Tax Refund
• Line 12: Business Income
• Lines 15: IRA Distributions
• People’s Trust & Yale Security
• Line 16: Pensions & Annuities
• Retirement Services Program
• Skip Alpine Pension Fund for now
Intermediate Training
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1) Basic Training Refresher
2) Alimony
3) State Tax Refund
4) Business Income
5) Retirement Income (with taxable amount)
6) Adjustments to Income
7) Itemized Deductions
8) Education Credit
9) Foreign Tax Credit
10) Residential Energy Credit
Adjustments to Income
• Decrease taxable income
• Found on Lines 23-35 of Form 1040
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Educator Expenses (Line 23)
Half of Self-Employment Tax (Line 27)
Early Withdrawal Penalty (Line 30)
Alimony (Line 31)
IRA (traditional) Contributions (Line 32)
Student Loan Interest (Line 33)
College Tuition Payments (Line 34)
Jury Duty (Line 35)
Educator Expenses
• Eligible Educators:
 K-12 teacher, instructor, counselor, principal,
or aide
 Worked at least 900 hours
• Ordinary and necessary amounts
• Books
• Supplies
• Equipment (including computers and
software)
Educator Expenses
• Link: Line 23  1040 Wkt2
• Enter qualified expenses up to $250 for
each person.
• If taxpayer and spouse are both eligible
educators, can deduct up to $500.
Half of Self-Employment Tax
• Offsets the tax burden placed on
individuals who do not have employers to
pay half of their taxes.
• TaxWise will automatically calculate this
adjustment on Form 1040, Line 27 if you
have completed a Sch C or Sch C-EZ.
Penalty on Early Withdrawal of Savings
• When a taxpayer withdraws savings before
maturity, a penalty is incurred.
• Box 3: Form 1099-INT or Form 1099-OID
• Can deduct these penalties from income.
• TaxWise automatically calculates the
adjustment on Form 1040, Line 30.
• Make sure you entered in ALL interest and
penalties imposed correctly on the Sch B.
Form 1099-OID
Alimony Paid
• Payment to a spouse or former spouse under a
divorce/separation agreement.
• Child support and voluntary payments are NOT
considered alimony.
• Alimony received is considered income.
• Deduct total alimony paid for the whole year, not
just one month.
• Enter in amount taxpayer paid and the recipient’s
SSN on Form 1040, Line 31.
• Pub 4012, E-3
IRA Contributions Deduction
• Pub 4012, Tab E-4
• IRA: Individual Retirement Arrangements
• Personal savings plan that offers tax advantages
to set aside money for retirement
• Earnings and gains on contributions are not
taxable until withdrawal
• Contributions to a traditional IRA can be either
deductible or nondeductible
IRA Contributions Deduction
• Eligibility Requirements:
• Only contributions to a traditional IRA are
deductible
• Age Limit: must be under the age of 70 ½ at the
end of the tax year
• Compensation: must have taxable compensation
• Time Limit: Contributions must be made by due
date of filing the return
• Contribution limit is the lesser of:
• $5,000 ($6,000 if > age 50)
IRA Deduction: Joint Returns
• If the taxpayers file a joint return and one
spouse’s compensation is greater than the
other’s compensation, then:
• Married taxpayers’combined contributions
cannot exceed combined compensation.
• Neither spouse can contribute more than
$5,000 ($6,000 if > age 50).
IRA Deduction: Excess Contribution
• Contributions for 2013 can be made up
until the due date of the return (April 15,
2013).
• An excess contribution above the limits and
any earnings on it will be taxed.
• They should still be reported on Form 8606
• If the taxpayer has made excess contributions,
refer them to a paid preparer!
IRA Deduction
• Link: Line 32  IRA Wkt
• Enter contributions on line 10
Student Loan Interest
• Pub 4012, Tab E-5
• Up to $2,500 of interest paid during the
year on a loan for qualified higher
education expenses in the name of a:
• Taxpayer
• Spouse
• Dependent (when the loan was obtained)
Note: Student must have been enrolled at least halftime in a program leading to a degree, certificate,
or other credential.
Student Loan Interest: Eligibility
• Loan was for an eligible student and was paid within a
reasonable period of time before/after obtaining the loan
• School IS:
• Accredited
• Qualified to participate in a student aid program or
conduct internship/residency programs leading to a
degree or certificate
• Taxpayer IS NOT:
• Filing as MFS
• Able to be claimed as a dependent
• If the taxpayer cannot be claimed as a dependent but
his/her parents paid the student loan interest, the
student can claim the deduction.
Student Loan Interest: Qualified Expenses
• Qualified expenses include tuition and fees
required for enrollment room and board,
transportation, books, and supplies
• Usually reported on Form 1098-E or
another statement from the lender
• Amount must be reduced by scholarships,
employer-provided benefits, or tax-free
education expenses
Form 1098-E
Link: Line 33  1040 Wkt2
• Link: Line 33  1040 Wkt2
Tuition and Fees Deduction
• Tuition amounts paid by the taxpayer are
reported on a 1098-T and can be entered as an
adjustment or a credit.
• The deduction can be claimed for the taxpayer,
spouse or any qualified dependent.
• Deduction cannot be claimed by taxpayer if
MFS or if claimed as a dependent.
• Only out-of-pocket expenses can be
claimed; you must subtract amounts paid
with scholarships and grants.
Form 1098-T
This is one of the options for reporting tuition and
fees. We will discuss the education credit later.
Tuition and Fees Deduction
• Taxpayers can deduct up to $4,000 in
qualified tuition and related expenses; but
NOT BOOKS.
• Link: Line 34  1040 Wkt2
Jury Duty Pay Given to Employer
• Jury duty pay is taxable income.
• BUT: if that pay is given to the employer, it
can be deducted as an adjustment.
• Enter the amount on Form 1040, Line 35,
Jury duty pay you gave to your employer.
TaxWise Practice – Kent Exercise
• Line 10: State Tax Refund
• Line 12: Business Income
• Lines 15: IRA Distributions
• People’s Trust & Yale Security
• Line 16: Pensions & Annuities
• Retirement Services Program
• Skip Alpine Pension Fund for now
• Adjustments to Income
• Line 31: Alimony Paid
• Line 32: IRA Contribution
• Line 33: Student Loan Interest
Intermediate Training
•
•
•
•
•
•
•
•
•
•
1) Basic Training Refresher
2) Alimony
3) State Tax Refund
4) Business Income
5) Retirement Income (with taxable amount)
6) Adjustments to Income
7) Itemized Deductions
8) Education Credit
9) Foreign Tax Credit
10) Residential Energy Credit
Itemized Deductions
• Every taxpayer can take a specific amount
for a “standard” deduction
• Reduces taxable income.
• Taxpayers can list out certain designated
expenses, and, if they total more than the
standard deduction, the taxpayer will
“itemize” deductions
• Reduces taxable income by a greater amount.
When to Itemize
• A taxpayer can receive a larger deduction by
itemizing if he/she has:
• At the Federal Level (higher SD):
• Home mortgage payment
• Large number of medical bills
• Etc.
• At the State Level (lower SD):
• Expenses that may/may not have been sufficient
to justify itemization on the federal level
Note: If a taxpayer is MFS and his/her spouse
itemizes, the taxpayer must also itemize,
regardless of whether the Standard Deduction
would be higher .
Qualifying Expenses
• Unreimbursed Medical Expenses
• Charitable Contributions
• Taxes
• Home Mortgage Interest
• Miscellaneous Deductions
Unreimbursed Medical Expenses
• A taxpayer can claim expenses for
• Him/Herself
• Spouse
• Dependents
• He/she can only deduct the amount that
exceeds:
• 7.5% of his/her AGI on federal returns
• 4% of his/her AGI on state returns
Covered Medical Expenses
• Unreimbursed medical and dental
expenses
• Eligible long-term care premiums
Be sure the expenses were not paid with pretax
dollars or reimbursed by an insurance company.
Deductible Medical Expenses
Co-pays to doctor, dentist, eye doctor
Prescription drugs
Cost of glasses or hearing aids
Cost of medical equipment
Health insurance premiums
Long-term care insurance premiums (cap on
amount based on age)
• Cost of surgery, operations
• Miles to and from doctor, parking fees and tolls
•
•
•
•
•
•
• 23 cents per mile
NOTE: For a complete listing of deductible and
nondeductible expenses see Pub 502 on the IRS website.
Nondeductible Medical Expenses
• Life insurance policy premiums
• Funeral, burial, cremation costs
• Unnecessary cosmetic surgery
• Nonprescription drugs (e.g. vitamins)
• Any expenses that are to be reimbursed
NOTE: For a complete listing of deductible
and nondeductible expenses see
Pub 502 on the IRS website.
Medical Expenses in TaxWise
(Click on the A Detail in the Loaded Forms Menu)
Enter in the amounts
for:
-
Medical miles
Insurance
premiums paid
Medicare (carries
over from 1040
Wkt1)
Other medical
expenses
(prescriptions,
glasses, etc.)
Charitable Contributions
• Qualifying Organizations: • Non-qualifying
Organizations:
• Religious
•
•
•
•
•
•
Charitable
Educational
Scientific
Literary
Prevent animal cruelty
War veterans
• Business (Chamber of
Commerce)
• Civic/Political
• Social
• Foreign
• Homeowners'
Associations
Charitable Contributions
• Deductible Items:
•
•
•
•
•
Monetary donations
Dues, fees and assessments
Fair market value (FMV) of clothing, furniture
Uniforms required to be worn during service
Unreimbursed transportation expenses (for
service)
• Tolls, bus fare, parking fees and cost of gas at 14
cents per mile
IMPORTANT: The taxpayer must keep receipts!
FMV of Donated Goods
• If a taxpayer has made non-cash
contributions to charity and does not have
receipts, use the following resources to
determine the FMV of donated items:
• Salvation_Army_Valuation_Guide_for_Donated_It
ems.pdf
• http://www.salvationarmyusa.org/usn/www_u
sn_2.nsf/0/D477340FFA28755C8525743D004
9D1EF?Opendocument
Charitable Contributions
• Nondeductible Expenses:
Raffle, bingo, lottery tickets
Tuition
Value of time of service
Blood
Car depreciation, insurance, general repairs or
maintenance
• Direct contributions to individuals
• The FMV of any good received in exchange for a
donation (t-shirts, CDs, tote bags, etc.)
•
•
•
•
•
Limits to Charitable Contributions
• Contributions that total more than 20% of
their AGI may be able to deduct only a
percentage of their contributions, and must
carry over the remainder to a later tax year
• If taxpayers have >$500 of contributions,
they need to be referred to a professional
preparer if they want to deduct the full
amount.
• Form 8283 (OUT OF SCOPE)
Recordkeeping
• Cash contribution
• Canceled check or bank statement
• Written communication from the charity
• Name of charity, date and amount
• Noncash contribution
• For each contribution < $250
• Written communication, description, FMV
• For each contribution between $250 and $500
• Written communication, description, FMV and
acknowledgement of any goods received in return
• For each contribution > $500
• Refer to professional preparer
Charitable Contributions in TaxWise
(Click on the A Detail in the Loaded Forms Menu)
Enter in the amounts for:
-
-
Charitable miles
Charitable cash
contributions
Uniforms required for
service
FMV of other than
cash contributions
Taxes
• Deductible
• Taxes imposed on and paid by the taxpayer
during the year
• Nondeductible
• Taxes the taxpayer pays for someone else
• Taxes someone else pays for the taxpayer
• Taxes not paid during the year
Taxes
• Deductible
• State and local taxes
• General sales tax on
specific items (cars,
aircraft, boats, homes)
• Real estate taxes
• Personal property
taxes
• Ad valorem tax on car
tags (total paid $24.50)
• Nondeductible
Federal taxes
Hunting licenses
Water/sewer
Taxes on alcohol,
tobacco, or gas
• Utilities
•
•
•
•
Taxes Paid in TaxWise
(Click on the Sch A in the Loaded Forms Menu)
Enter in the amounts for:
-
City/county real
estate taxes (6)
Personal property
taxes (7)
Ad valorem tax, make
sure to subtract
$24.50 (amount of car
tag) before entering
(8)
State and Local Taxes
• Taxpayers can choose one of the following,
but not both:
• Income taxes
• Sales taxes
• County sales tax amounts differ
• Alabama state sales tax is always 4%
Taxes Paid in TaxWise
(Click on the Sch A in the Loaded Forms Menu)
TaxWise automatically
chooses 5a or 5b after
the following are
completed:
- The amount for
income taxes
automatically fills
- Link: Line 5b  Sales
Tax
- Line 1: Enter in AL
- Line 3: Check Yes and
enter local sales tax
(6 for Birmingham)
- Line 4: Check Yes and
enter 4
Taxes Paid in TaxWise
• On the bottom of the Sales Tax worksheet
from the previous slide, there is an option
to enter general sales tax paid on specific
items:
• *Motor vehicles
• *Aircraft, boats, homes and home building
material
Example: State sales tax of $1,565 on a new car.
Home Mortgage Interest
• Any interest paid on a loan secured by the
taxpayer’s home, line of credit, or a home
equity loan.
• Is generally reported on Form 1098
• Only taxpayers who are legally liable for the
debt can deduct the interest
• Taxpayers may have more than one mortgage
or may have refinanced and have multiple
statements
• Points: only points paid as a form of interest
(for the use of money) can be deducted
Home Mortgage Interest
(Interest, Points and Premiums may be deductible.)
Note: Real estate taxes may be reported in
Box 5 and should be entered on Line 6.
Home Mortgage Interest in TaxWise
(Click on the Sch A in the Loaded Forms Menu)
Enter the amounts for:
-
Home mortgage
interest and points
(add if needed)
(10)
-
Mortgage
insurance
premiums (13)
Nondeductible Interest
• Personal interest:
•
•
•
•
Personal loans
Car loans
Credit cards
Etc.
Casualty and Theft Losses
• Out of scope!
Miscellaneous Deductions
•
•
•
•
•
•
•
•
•
•
Sch A, Lines 21 - 28
Union dues
Uniforms (that cannot be worn in any other circumstance)
Professional books, journals
Small tools and supplies, used for business
Employment-related educational expenses
• Includes educator expenses >$250 (after the adjustment)
Expenses for looking for a new job
Tax preparation fee from last year
Safe deposit box
Gambling losses up to amount of winnings
Miscellaneous Deductions in TaxWise
(Click on the Sch A in the Loaded Forms Menu)
Enter the amounts and
descriptions for:
-
-
Employment: job travel,
union dues, work uniform,
job education, literary journal
for work, educator expenses
(21)
Tax preparation fees (22)
Safe deposit box (23)
Miscellaneous: literary
journal not for work,
gambling losses from W2-G
(28)
Nondeductible Expenses
• Burial or funeral expenses
• Wedding expenses
• Fees and licenses
• Fines, penalties, traffic tickets
• Home repairs and insurance
• Rent
• Insurance premiums (except health and
mortgage)
• Losses from sale of home
Practice
Are the following expenses deductible?
1. Medical insurance premiums
2. Vitamins
3. Federal income tax
4. Interest on car loan
5. Church contribution
6. Tax preparation fee from last year
Practice
Are the following expenses deductible?
1. Medical insurance premiums - YES
2. Vitamins
3. Federal income tax
4. Interest on car loan
5. Church contribution
6. Tax preparation fee from last year
Practice
Are the following expenses deductible?
1. Medical insurance premiums - YES
2. Vitamins - NO
3. Federal income tax
4. Interest on car loan
5. Church contribution
6. Tax preparation fee from last year
Practice
Are the following expenses deductible?
1. Medical insurance premiums - YES
2. Vitamins - NO
3. Federal income tax - NO
4. Interest on car loan
5. Church contribution
6. Tax preparation fee from last year
Practice
Are the following expenses deductible?
1. Medical insurance premiums - YES
2. Vitamins - NO
3. Federal income tax - NO
4. Interest on car loan - NO
5. Church contribution
6. Tax preparation fee from last year
Practice
Are the following expenses deductible?
1. Medical insurance premiums - YES
2. Vitamins - NO
3. Federal income tax - NO
4. Interest on car loan - NO
5. Church contribution - YES
6. Tax preparation fee from last year
Practice
Are the following expenses deductible?
1. Medical insurance premiums - YES
2. Vitamins - NO
3. Federal income tax - NO
4. Interest on car loan - NO
5. Church contribution - YES
6. Tax preparation fee from last year - YES
Itemized Deductions (Alabama Return)
• If the taxpayer is itemizing deductions on
the Federal and State returns or if the
taxpayer is just itemizing on the State
return, you always enter the itemized
deductions on Sch A on the Federal return.
• Never start to itemize on the AL A.
• It is okay to leave the deductions on the Federal
return even if the taxpayer does not have
enough to itemize, because there is a good
chance he/she can itemize on the State return.
• All of the information from the Sch A
carries over to the AL A.
Itemized Deductions (Alabama Return)
• All information will carry over from the Sch
A to the AL A, but you will need to add a
description if there is an amount listed on
line 8 of the AL A.
• Usually is the the local tax (from W-2), property
tax and/or ad valorem tax.
• Put multiple descriptions if necessary.
TaxWise Practice – Kent Exercise
• Adjustments to Income
• Line 31: Alimony Paid
• Line 32: IRA Contribution
• Line 33: Student Loan Interest
• Line 40: Itemized Deductions
SaveFirst 2013-2014
Campus Fellow Training
Intermediate and Advanced
Intermediate Training
•
•
•
•
•
•
•
•
•
•
1) Basic Training Refresher
2) Alimony
3) State Tax Refund
4) Business Income
5) Retirement Income (with taxable amount)
6) Adjustments to Income
7) Itemized Deductions
8) Education Credit
9) Foreign Tax Credit
10) Residential Energy Credit
Education Credits
• Offset higher education expenses paid
during the year for a taxpayer, spouse, or a
dependent
• Two types of credits available:
• American Opportunity Credit
• 40% (up to $1,000) is refundable
• Lifetime Learning Credit
• Nonrefundable credit
Education Credits
• Tuition amounts paid by the taxpayer are
reported on a 1098-T and can be entered as an
adjustment or a credit.
• Determine if the adjustment or credit is more
advantageous.
Education Credits: Eligibility
• Filing status cannot be MFS
• Cannot be claimed as a dependent on
someone else’s return
• Qualified expenses: tuition and fees
required for enrollment
• Accredited institution
• CAN claim on the basis of expenses paid
with student loans
• Taxpayer or student will often receive Form
1098-T
Expenses That Do Not Qualify
• Room and board
• Insurance
• Medical expenses (including student health
fees)
• Transportation costs
• Personal, living or family expenses
• Expenses for a course involving sports,
games or hobbies, unless it is required for
the degree/certificate
Education Credits: Dependents
• When the student can be claimed as a
dependent:
• Taxpayer must claim credit if taxpayer claims
the exemption.
• Student must claim credit if taxpayer does not
claim exemption.
• If the taxpayer claims the dependency
exemption, any amount paid by the student
is considered to have been paid by the
taxpayer.
Education Credits Compared
AO (Hope) Credit
Lifetime Learning Credit
Up to $2,500 per eligible student
Up to $2,000 credit per return
Available for the 1st 4 years of college
Available for all years
Student must be pursuing a degree or
recognized education credential
Student does not need to be pursuing a
degree or credential
Student must be enrolled at least half
time
Available for one or more courses
No felony drug conviction on
student’s record
Felony drug conviction does not apply
Expenses include tuition, fees, and
course materials
Expenses include only tuition and fees
Qualified Expenses for Credit
• American Opportunity (Hope) Credit
• Qualified tuition and related expenses up to $4,000 per
eligible student
• Includes expenses for course materials (books,
supplies, and equipment needed for a course of study,
whether or not they were purchased from institution)
Link: Line 49  8863 Pg 2
Qualified Expenses for Credit
• Lifetime Learning Credit
• Expenses include only tuition and fees
• Course-related books, supplies and fees are
included ONLY if they must be paid to the institution
as a condition of enrollment
Link: Line 49  8863 Pg 2
Education Credits: No Double Benefits
• The taxpayer CANNOT claim:
• Both the American Opportunity (Hope) and
Lifetime Learning credits for the SAME qualified
tuition expenses
• A credit and the adjustment
• Expenses paid with a tax-free scholarship,
grant, or other assistance, including Pell grants
(in other words, the taxpayer must subtract
these scholarships from the total expenses
before claiming either credit)
Qualified Expenses
• IMPORTANT!
• Verify with the taxpayer that the amount in
Box 1 or 2 of Form 1098-T is actually the
amount paid in the current tax year for
qualified expenses!
Payments for the Next Academic Year
• Taxpayers can claim payments prepaid for
the academic period that begins in the first
three months of the next calendar year.
• Example:
• Michael pays $1,500 in December 2013 for the
winter semester that begins in January 2014.
• He can use the $1,500 paid in December 2013 to
compute his credit for 2013.
• However, he cannot count the $1,500 again on
his 2014 return.
Determining the Amount of the Credit
• Review the list of qualifying students and
expenses and decide which credit is best.
• Enter each qualifying student and SSN on
Form 8863
• Enter the students’ qualifying expenses
• Include only qualified expenses
• Are reduced by untaxed benefits (scholarships,
grants, etc.)
• Are reduced by amounts paid in previous years
• Do not exceed the limit for the credit
Education Credits in TaxWise
Education Credits in TaxWise
Education Credits in TaxWise
• Line 23:
• Yes  Lifetime Learning (Line 31)
• No  American Opportunity (Line 24)
Education Credits in TaxWise
OR
Practice
James takes one course at a local community
college. He received a Form 1098-T
showing qualified tuition expenses of
$1,000. He lives with his parents, who can
claim him as a dependent. Who is entitled
to claim the credit? Which credit?
Practice
James takes one course at a local community
college. He received a Form 1098-T
showing qualified tuition expenses of
$1,000. He lives with his parents, who can
claim him as a dependent. Who is entitled
to claim the credit? Which credit?
If James’s parents claim him, they must claim the credit.
If James’s parents do not claim him, James must claim
the credit.
Lifetime Learning Credit
Practice
LaQuandra is a sophomore enrolled at UAB fulltime. She provides all of her own support. She
paid $10,000 in 2013 for tuition and fees for
enrollment to UAB. She received a tax-free
scholarship worth $4,000, and paid the rest
from a student loan in her name. Can
LaQuandra claim an education credit? Which
one? How much of her expenses are qualified
expenses?
Practice
LaQuandra is a sophomore enrolled at UAB fulltime. She provides all of her own support. She
paid $10,000 in 2013 for tuition and fees for
enrollment to UAB. She received a tax-free
scholarship worth $4,000, and paid the rest from
a student loan in her name. Can LaQuandra claim
an education credit? Which one? How much of
her expenses are qualified expenses?
Yes
American Opportunity
Qualified expenses = $6,000 ($4,000)
Intermediate Training
•
•
•
•
•
•
•
•
•
•
1) Basic Training Refresher
2) Alimony
3) State Tax Refund
4) Business Income
5) Retirement Income (with taxable amount)
6) Adjustments to Income
7) Itemized Deductions
8) Education Credit
9) Foreign Tax Credit
10) Residential Energy Credit
Foreign Tax Credit
• Taken if a taxpayer paid income tax to a foreign
country; U.S. possession; or political
subdivision, agency, or instrumentality of a
foreign country.
• Foreign tax paid > $300 is out of our scope!
• We may see some foreign tax reported on a
1099-DIV in Box 6.
• Enter the amount of foreign tax paid on Form
1040, Line 47.
Form 1099-DIV
Intermediate Training
•
•
•
•
•
•
•
•
•
•
1) Basic Training Refresher
2) Alimony
3) State Tax Refund
4) Business Income
5) Retirement Income (with taxable amount)
6) Adjustments to Income
7) Itemized Deductions
8) Education Credit
9) Foreign Tax Credit
10) Residential Energy Credit
Residential Energy Credit
• Nonrefundable credit:
• Residential energy-efficient property credit
(Part I) – OUT OF SCOPE!
• Nonbusiness energy property credit (Part II)
• Available to a taxpayer:
• Who made purchases for qualified energy
efficient improvements for his/her main home
• Who owns his/her home
Residential Energy Credit
• Non-Business Energy Property (home
improvements)


Heating, ventilating, air-conditioning, insulation, roofs
water heaters (non-solar), windows, and doors.
Part II of the 5695 (IN SCOPE)
• Residential Energy-Efficient Property Credit


Solar panels, solar-powered water heaters, geothermal
heat pumps, photovoltaic systems, small wind energy
system, fuel cells
Part I of the 5695 (OUT OF SCOPE)
Residential Energy Credit
• Nonbusiness energy property credit
• Form 5695, Part II
• Eligible expenses include:
• High-efficiency heat pumps, air conditioners
(HVAC), and water heaters;
• Energy-efficient windows, doors, insulation
materials, and certain roofs (metal and asphalt)
Residential Energy Credit - Limits
• Total combined credit - $500
• Windows credit limit - $250
• Air circulating fan - $50
• Natural gas, propane, oil furnace or hot
water boiler - $150
• Energy-efficient building property - $300
Link: Line 52  5695 Pg 1
(then click on Pg 2)
Fill in 19 a, b and c
Residential Energy Credit
Line 20: Enter any
amounts claimed in
the previous 4 years
Line 21 (Qualified
energy efficiency
improvements):
a: Insulation
b: Exterior doors
c: Roof (metal or
asphalt)
d: Exterior
windows/skylights
Do NOT include cost of on-site
preparation and installation!
Residential Energy Credit
Line 24 (Residential
energy property costs):
a: Energy-efficient
building property
(electric heat pump,
central air conditioner,
water heater)
b: Natural gas, propane
or oil furnace, hot
water boiler
c: Main air circulating
fan used in natural gas,
propane or oil furnace
Do include cost of on-site
preparation and installation!
TaxWise Practice – Kent Exercise
• Line 27: Foreign Tax Credit
• Line 49: Education Credit
• Line 52: Residential Energy Credit
Advanced Training
• 1) Credit for the Elderly or Disabled
• 2) 1st Time Homebuyer Credit Repayment
• 3) Unreported Tips (& Social Security/Medicare
Taxes)
• 4) Retirement (taxable amount not determined)
• 5) Sale of Stock
• 6) Sale of Home
• 7) Schedule K-1
• 8) Injured Spouse/Deceased Taxpayer
• 9) Rental Income
• 10) Finishing the Return
• 11) Additional Responsibilities
Elderly & Disabled Credit: Schedule R
• Taxpayer is
 Over 65 AND/OR
 Retired and on disability benefits before the
mandatory retirement age
• Elderly are seldom eligible because of income
limits.
• Mandatory retirement age is set by a taxpayer’s
employer.
• TaxWise automatically calculates this credit on a
Schedule R.
Tab G-5 in Pub 4012
Schedule R in TaxWise
• TaxWise will calculate this credit if the date
of birth is provided.
• Be sure to include the taxpayer’s Social
Security benefits, regardless of their
taxability, to ensure the calculation is
correct!
• Link: Line 53  Sch R
Advanced Training
• 1) Credit for the Elderly or Disabled
• 2) 1st Time Homebuyer Credit Repayment
• 3) Unreported Tips (& Social Security/Medicare
Taxes)
• 4) Retirement (taxable amount not determined)
• 5) Sale of Stock
• 6) Sale of Home
• 7) Schedule K-1
• 8) Injured Spouse/Deceased Taxpayer
• 9) Rental Income
• 10) Finishing the Return
• 11) Additional Responsibilities
Line 59b: Repayment of First-time
Homebuyers Credit (Form 5405)
• Individuals who took $7,500 credit in 2008 to
buy a home had to begin to repay in 2010
• At least $500 (1/15 of that owed) has to be
paid and reported in “Additional Taxes”
section on Line 59b
Link: Line 59b  5405 Pg 2
Filling out Form 5405
1) Line 1: If the taxpayer ceased using the
home as the main home, enter the date
2) Line 4: Enter the amount of credit
claimed
3) Line 5: Enter the amount of credit repaid
in prior years
4) Line 8: Enter the amount the taxpayer is
repaying for the year; has to be at least
$500
Form 5405 in TaxWise
Form 5405 in TaxWise
Advanced Training
• 1) Credit for the Elderly or Disabled
• 2) 1st Time Homebuyer Credit Repayment
• 3) Unreported Tips (& Social Security/Medicare
Taxes)
• 4) Retirement (taxable amount not determined)
• 5) Sale of Stock
• 6) Sale of Home
• 7) Schedule K-1
• 8) Injured Spouse/Deceased Taxpayer
• 9) Rental Income
• 10) Finishing the Return
• 11) Additional Responsibilities
Line 7: Wages, Salaries, Tips
Form W-2 (Unreported Tips)
Reported Tips
• Tips totaling more than $20/month
• Usually reported to employer
• Already totaled in Box 1 of Form W-2.
• Allocated tips of any amount
• Appear in Box 8 of W-2
• Tips not reported to employer
• Must be reported to the federal government
on a Form 4137
Tips
• If taxpayers have jobs in which tips are normally
received (waiter, bellhop, hotel housekeeper,
etc.), make sure to ask about any tips received.
• >$20/month at one job and reported to employer:
• Appear on W-2, boxes 1, 5 and 7
• >$20/month at one job and not reported:
• Report on line 4 of Form 4137
• Subject to SS and Medicare taxes
• <20/month at one job and not reported:
• Report on line 5 of Form 4137
• NOT subject to SS and Medicare taxes
Line 7: Tips Not Reported
(Form 4137)
Link: Line 7  Form 4137
(Enter in unreported tips on Line 4 or Line 5)
Unreported Tips (SS and
Medicare Taxes)
• Unreported tips entered on Form 4137 will
display on Line 7, Form 1040
• Form 4137 also calculates the employee
portion of social security and Medicare
taxes.
• These taxes will automatically display on Line
57, Form 1040
Advanced Training
• 1) Credit for the Elderly or Disabled
• 2) 1st Time Homebuyer Credit Repayment
• 3) Unreported Tips (& Social Security/Medicare
Taxes)
• 4) Retirement (taxable amount not determined)
• 5) Sale of Stock
• 6) Sale of Home
• 7) Schedule K-1
• 8) Injured Spouse/Deceased Taxpayer
• 9) Rental Income
• 10) Finishing the Return
• 11) Additional Responsibilities
Taxable Portion (Retirement)
• Depending on employee contributions,
income from retirement plans can be:
• Fully taxable
• Partially taxable
• Not taxable
Determining the Taxable Portion
• Typically, the taxable amount is reported in Box 2a
of the 1099-R.
• If Box 2a is empty, first enter the 1099-R as normal
and then use the Simplified Method to calculate
the tax-free portion of each pension payment.
The Simplified Method
• If the taxpayer made after-tax
contributions toward the pension, a portion
of the annuity payment is not taxable.
• The Simplified Method calculates the nontaxable amount.
• Generally, if the starting date of the payments
was prior to July 2, 1986, the Simplified Method
would not apply.
• If the taxpayer used the 3-year rule, the annuity
is fully taxable. If he used the general rule, refer
him to a professional tax preparer.”
Info Needed to Use Simplified Method
• Cost in retirement plan at start date
• From Box 9b of 1099-R
• Age of retiree (and spouse if a joint annuity) at
start date
• Number of months for which payments were
received during the year
• Usually 12, except for the year in which payments
started or ended
• Amount recovered tax free in prior year
If You’re Missing Information
• Age of retiree (or spouse) at starting date:
• Look at past year returns and confirm with
taxpayer
• Consult with the IRS
• Call administrator of the plan (find phone
number on 1099-R or online)
• Amount that has already been excluded:
• Look at last year’s return OR
• To calculate: Line 3 (monthly exclusion amount)
times the number of months prior to 2013.
• If unable to determine, leave blank. This does not
affect the taxable amount for the current year.
Simplified Method
Enter in the amounts for:
- Cost in plan at start date
from 9b of 1099-R (line 1)
- Age (or combined age) at
start date (line 2)
- Number of months
payments were received in
2013 (line 4)
- Amount recovered tax
free in prior years (line 5)
Simplified Method
• Do NOT enter an amount if Box 2a of the
1099-R in TaxWise if the amount was blank
on the actual 1099-R form.
• TaxWise will calculate the taxable portion
from the Simplified Method and will carry
it over to Form 1040, line 16b.
Remember: You need to determine if the
plan is defined benefits/contributions.
Check Box 1 if it is defined benefits.
Advanced Training
• 1) Credit for the Elderly or Disabled
• 2) 1st Time Homebuyer Credit Repayment
• 3) Unreported Tips (& Social Security/Medicare
Taxes)
• 4) Retirement (taxable amount not determined)
• 5) Sale of Stock
• 6) Sale of Home
• 7) Schedule K-1
• 8) Injured Spouse/Deceased Taxpayer
• 9) Rental Income
• 10) Finishing the Return
• 11) Additional Responsibilities
Investment Income
• Investment property produces investment
income
• Interest
• Dividends
• Capital gains
Capital Gains
• Sale of stock
• Sale, exchange or redemption of mutual
fund shares
Sale:
Exchange:
Redemption:
Transfer of shares
for money
Transfer of shares
for other shares
Fund reacquires
shares in
exchange for
money or property
Capital Gains: 1099-B
Sale of Stock
Gain = Amount Realized – Adjusted Basis
In Layman’s Terms….
Gain = Money You Get – Money You Paid
Basis: original cost of the asset
Adjusted basis: original cost of the shares of
stock increased or decreased to account for
commissions, fees, depreciation, etc.
Determining Gain or Loss
• GAIN: amount realized is GREATER than
adjusted basis
• LOSS: amount realized is LOWER than
adjusted basis
Info Needed from 1099-B
• Basis or Adjusted Basis
• Holding Period: Long or Short Term
• Proceeds from Sale
If any of this information is missing from the
1099-B, contact the stockbroker; if the basis
cannot be determined, the basis is zero.
Determining Adjusted Basis
• INCREASE adjusted basis per share for:
• Commissions
• Fees
• DECREASE adjusted basis per share for:
• Stock dividends
• Stock splits
Inherited property = FMV of property on
date of descendent’s death.
Gross vs Net Proceeds
• Gross proceeds
• Commissions/fees not already included
• Preparer must add them to the basis
• Net proceeds
• Adjustment has already been made
Remember: Basis must be adjusted for
commissions/fees for purchases OR sale.
Gross vs Net Proceeds
If the Gross Proceeds Box is checked, report
the broker’s commissions/fees on Form
8949 Pg 1, Column g.
Holding Period
• Period starts the day after the property is
acquired and continues through the day it is
sold.
Short-term:
held for one year
less
Long-term:
held for more than
one year
Inherited property is ALWAYS long-term.
Determining Shares Sold
• Specific Share Identification
• Taxpayer CAN identify which shares were sold
(received written confirmation from broker)
• Basis = adjusted basis of specific shares
• FIFO (First In, First Out)
• Taxpayer CANNOT identify which shares were sold
• Basis = adjusted basis of oldest shares
Reporting Income from Sale of Stock
Information from 1099-B is reported on Sch D.
Information from sale of stock may also be reported on a
statement from the investment company.
Reporting Income from Sale of Stock
Line 13 (if short-term)
Line 13 (if long-term)
Sch D Pg 1
Sch D Pg 1
1e, 2e or 3e
8e, 9e or 10e
8949 Pg 1
8949 Pg 1
1a
3a
Cap Gn Wkt
Cap Gn Wkt
Reporting Sale of Stock: Short-Term
Line 13 (if short-term)
Sch D Pg 1
1e, 2e or 3e
8949 Pg 1
Link from 1e: 1099-B has basis reported
Link from 2e: 1099-B does not have the basis reported
Link from 3e: sale of stock is NOT reported on a 1099-B
Reporting Sale of Stock: Short-Term
This is the 8949 Pg 1 Form: DO NOT TYPE ANY NUMBERS ON THIS FORM!
Choose A, B
or C
Then, link: 1a
Cap Gn Wkt
Duplicate the 8949 Pg 1 form as needed for A, B and C!
Reporting Sale of Stock: Short-Term
(a): From Box 9 of 1099-B
1099: Enter A, B or C
TSJ: Taxpayer, spouse or joint
(c): From Box 1b of 1099-B
(d): From Box 1a of 1099-B
(e): From Box 2 of 1099-B
(f): From Box 3 of 1099-B
(g): Enter in commissions/fees (unless reflected in Box 2 of 1099-B)
Reporting Sale of Stock: Long-Term
Line 13 (if long-term)
Sch D Pg 1
8e, 9e or 10e
8949 Pg 1
Link from 8e: 1099-B has basis reported
Link from 9e: 1099-B does not have the basis reported
Link from 10e: sale of stock is NOT reported on a 1099-B
Reporting Sale of Stock: Long-Term
This is the 8949 Pg 1 Form: DO NOT TYPE ANY NUMBERS ON THIS FORM!
Choose A, B
or C
Then, link: 3a
Cap Gn Wkt
Duplicate the 8949 Pg 1 form as needed for A, B and C!
Reporting Sale of Stock: Long-Term
(a): From Box 9 of 1099-B
1099: Enter A, B or C
TSJ: Taxpayer, spouse or joint
(c): From Box 1b of 1099-B
(d): From Box 1a of 1099-B
(e): From Box 2 of 1099-B
(f): From Box 3 of 1099-B
(g): Enter in commissions/fees (unless reflected in Box 2 of 1099-B)
Remember: Form 8949
• Different types of transactions:
• A: Basis reported on 1099-B
• B: Basis not reported on 1099-B
• C: 1099-B not received
A taxpayer with different types of transactions
must file separate 8949s.
Sch D in TaxWise
• Part I: Short-Term Capital Gains/Losses
• Part II: Long-Term Capital Gains/Losses
• Part III: Summary
Sch D is where the information carries over
to and the aggregate GAIN or LOSS is
reported.
Capital Gain Distributions
• Appear in Box 2a of 1099-DIV
Reporting Capital Gains
• Enter on a Dividend Statement
• Link: Line 9  Sch B  Dividend Statement
• Amount appears on Sch D with other stock
information
Carryover Losses
• Loss that can be claimed in one year is the
lesser of:
•
•
The total loss OR
$3,000 ($1,500 if MFS)
• Unused portion of loss can be carried over
from year to year until total loss is claimed
•
•
Remains long-term or short-term.
If not claimed in some year, unused loss is
decreased by the amount that should have been
claimed.
• Report carryover losses on Sch D Pg 1.
• Line 6 (short-term) or line 14 (long-term).
Reporting Carryover Losses: Sch D
Mutual Funds
• Taxpayer will receive Form 1099-DIV and 1099-B

1099-DIV reports capital gain distributions

1099-B reports sell of shares in the mutual fund itself
• Use cost basis OR average basis

If elected, average basis must be used for all accounts in
the same fund in all succeeding years (this must be
determined by broker).
• Capital gains are reported on 1099-DIV:

Enter on dividend statement; TaxWise will transfer
amount to Sch D.
For more info, see Publication 550.
Worthless Securities
• Worthless securities: stocks or bonds
• No reasonable hope that investors will get
anything for their holdings
• Even if only worth pennies, shares are not
worthless
• Treated as if sold on the last day of the tax
year
Refer taxpayers to a professional preparer!
Sale of Stock: Out of Scope Topics
• Stock received s a gift
• Stock received as a part of Employee Stock
Option Plan
• Inherited stock with basis calculated other
than using date of descendant's death
• Bonds or other tax-exempt holdings with
basis not determined.
Review
• If a taxpayer CANNOT identify which shares
were sold if he/she has multiple forms of
stock, how do you determine which shares
to report?
• FIFO
• True or False: If a taxpayer has different
types of transactions (A, B and C), he/she
can report all types on the same 8949 form.
• False: A taxpayer with different types of
transactions must file separate 8949s.
Practice
John bought 100 shares of ABC stock at $10
each in 2004. Then, he bought 50 additional
shares at $12 each in 2005. He had to pay a
commission of $50 to acquire the 2005 stocks.
What is his basis in the ABC stock?
Practice - Answer
John bought 100 shares of ABC stock at $10
each in 2004. Then, he bought 50 additional
shares at $12 each in 2005. He had to pay a
commission of $50 to acquire the 2005 stocks.
What is his basis in the ABC stock?
(100 shares * $10) + (50 shares * $12) + $50
commission = $1,650
Practice
On March 15, Bill bought 1,000 shares of stock
for $15,000, including commission. On March
15, one year later, he sold 600 shares of the
stock for $7,800, net proceeds (shown on Form
1099-B). Is this short-term or long-term? Is this
a loss or a gain?
Practice - Answer
On March 15, Bill bought 1,000 shares of stock
for $15,000, including commission. On March
15, one year later, he sold 600 shares of the
stock for $7,800, net proceeds (shown on Form
1099-B). Is this short-term or long-term? Is this
a loss or a gain?
Short-term loss:
$7,800 - [($15,000 ÷ 1,000) x 600] = -$1,200
Practice
1991 100 shares $10/each
1992 200 shares $11/each
1993 100 shares $9/each
In 2013, Alice sold 150 shares, but cannot
identify which shares she sold. Which shares
do we assume that she sold, and what is the
basis?
Practice - Answer
1991 100 shares $10/each
1992 200 shares $11/each
1993 100 shares $9/each
In 2013, Alice sold 150 shares, but cannot
identify which shares she sold. Which shares do
we assume that she sold, and what is the basis?
100 shares from 1991 and 50 shares from 1992.
BASIS = (100*$10) + (50*$11) = $1,550
FIFO!
Practice
Ruth bought 200 shares of XYZ stock for $600.
She paid a $50 fee to acquire the shares. She
sold all of the shares for $900. She paid a 5%
($45) commission to sell the shares. Her 1099B lists gross proceeds of $900. What is the
adjusted basis? What is the gain or loss?
Practice - Answer
Ruth bought 200 shares of XYZ stock for
$600. She paid a $50 fee to acquire the
shares. She sold all of the shares for $900.
She paid a 5% ($45) commission to sell
the shares. Her 1099-B lists gross
proceeds of $900. What is the adjusted
basis? What is the gain or loss?
Adjusted Basis = $600 + $50 + $45 = $695
Gain = $900 – $695 = $205
TaxWise Practice – Kent Exercise
• Briefly review Elderly Credit,
Homebuyer Repayment and Tips Forms
• Line 16: Pensions & Annuities
• Retirement Services Program
• Skip Alpine Pension Fund for now
• Line 13: Sale of Stock
• Line 9
Advanced Training
• 1) Credit for the Elderly or Disabled
• 2) 1st Time Homebuyer Credit Repayment
• 3) Unreported Tips (& Social Security/Medicare
Taxes)
• 4) Retirement (taxable amount not determined)
• 5) Sale of Stock
• 6) Sale of Home
• 7) Schedule K-1
• 8) Injured Spouse/Deceased Taxpayer
• 9) Rental Income
• 10) Finishing the Return
• 11) Additional Responsibilities
Sale of Home
• Taxpayers can exclude $250,000 ($500,000
if MFJ) of the gain from taxable income.
• If they meet Ownership and Use Tests.
• Not excluded gain in two years prior to current
sale of home.
• If the taxpayer can exclude all of the gain, it
is not necessary to report the sale.
• A loss cannot be deducted, but taxpayers
still need to report the loss.
Ownership and Use Tests
• If the 5 years preceding date of sale,
taxpayer must:
• Own the home for at least 2 years (either
spouse if MFJ)
• Live in the home as his/her main home for at
least 2 years (both spouses if MFJ)
• Can be different 2-year periods
Important: If either spouse does not meet
requirements, it is OUT OF SCOPE!
Determining Main Home
• Taxpayers CANNOT choose their main
home!
Must live in the home most of the time
 In same location as place of employment,
organizations, church, banks
 Other family members live there
 Address for bills and homestead exemption
 Address listed on tax returns, driver’s
license, car registration, voter registration

Reporting the Gain
• Gain = Amount Realized – Adjusted Basis
• Selling price: Total amount received from sale
• Amount realized: Selling price - selling expenses
• Basis:
 The price of purchase OR
 FMV on date of decedent’s death (inherited property)
• Adjusted basis: Additions/improvements useful life > 1
year (pool, roof, additional room, etc.)
Reporting the Gain
• Gains are NOT reported unless greater than
exclusion amount!
• UNLESS taxpayer receives 1099-S (reported, but
not taxed)
• Report on Part II of Schedule D (long-term
gains)
• Cannot deduct losses:
• If taxpayer receives a 1099-S, he/she must
report a loss of “0” on Sch D.
Reporting a Loss on Sale of Main Home
• If a taxpayer has a loss on the sale of a main home and
a 1099-S was received, you must report the loss on
Form 8949 even though it is NOT DEDUCTIBLE.
Link: Line 13  Sch D Pg 1 10e  8949 Pg 2  Cap Gn Wkt
Advanced Training
• 1) Credit for the Elderly or Disabled
• 2) 1st Time Homebuyer Credit Repayment
• 3) Unreported Tips (& Social Security/Medicare
Taxes)
• 4) Retirement (taxable amount not determined)
• 5) Sale of Stock
• 6) Sale of Home
• 7) Schedule K-1
• 8) Injured Spouse/Deceased Taxpayer
• 9) Rental Income
• 10) Finishing the Return
• 11) Additional Responsibilities
Sch K-1
• Reports the taxpayer’s share of income or
distributions from partnerships, S Corporations, and
some estates & trusts.
• The only Sch K-1 Income in our scope:
•
•
•
•
Interest
Dividend
Capital Gain/Loss
Royalty Income
Royalty Income reported on a 1099-MISC is out of scope!
Schedule K-1
• Reports income from:
•
•
•
•
Partnership
S-corporation
Estate
Trust
Types of Income on Sch K-1
Type if Income
Where to Report
Taxable Interest
8a  Sch B  1b  Interest
Stmt
8a  Sch B  1b  Interest
Stmt
9a  Sch B  5a  Dividend
Statement
Schedule D
(discussed earlier)
Tax Exempt Interest
Dividends
Capital Gains/Losses
Royalties
17  Sch E Pg 1  1*C K1
P/S Pg 1  Line 7/6
Reporting Tax Exempt Interest
• Link: Line 8a  Sch B  1b  Interest Stmt
• Enter in E for NAEOB
• Enter amount from Box 8 of 1099-INT to NAEOB
amount
Reporting Royalties
• Link: Line 17  Sch E Pg 1  1*C K1 P/S Pg 1
• Enter amount from Box 7 of Sch K-1 to Line 7/6
Sch K-1: Out of Scope Topics
• Any income NOT listed on previous slide!
• Royalty income on a 1099-MISC is OUT OF
SCOPE!
Seller-Finance Mortgages
• If a taxpayer is collecting payments on a
seller-financed mortgage, the interest
received on the loan must be reported as
income.
• Link: Line 8  Sch B
• Enter information in Part 1a: Seller-financed
mortgages
Seller-Finance Mortgages
• Enter the buyer’s name, address and social
security number
• Enter the amount of interest received on the
loan
Advanced Training
• 1) Credit for the Elderly or Disabled
• 2) 1st Time Homebuyer Credit Repayment
• 3) Unreported Tips (& Social Security/Medicare
Taxes)
• 4) Retirement (taxable amount not determined)
• 5) Sale of Stock
• 6) Sale of Home
• 7) Schedule K-1
• 8) Injured Spouse/Deceased Taxpayer
• 9) Rental Income
• 10) Finishing the Return
• 11) Additional Responsibilities
Deceased Taxpayer
• Though it is best to see a will in order to make
sure that the person filing for the decedent is
doing so properly, it is not necessary.
• We can trust an individual who claims to be the
personal representative of the decedent.
• Must be filed as paper returns. Write
DECEASED in large, bold letters at the top of
the 1040.
• Also record the NAME and the DATE OF
DEATH at the top in large, bold letters.
Deceased Taxpayer
• Complete the tax return as normal.
• But the personal representative of the
deceased taxpayer must put his or her
name in the section where the spouse
would go.
• The representative also needs to put his or
her own address on the form.
Injured Spouse
• If a taxpayer wishes to file MFS to avoid an
offset of their refund against their spouse’s
outstanding debts, suggest they file Form
8379, Injured Spouse Allocation.
• When a joint return is filed and only one
spouse owes a past-due amount, the other
spouse can be considered an injured spouse.
• Debts may include past due child support, student
loans, or tax liability
Injured Spouse
• The injured spouse:
• Must not be legally obligated to pay the pastdue amount AND
• Must have made and reported tax payments or
claimed a refundable tax credit
• If eligibility requirements are met, injured
spouses may file Form 8379 to receive their
share of the refund.
Advanced Training
• 1) Credit for the Elderly or Disabled
• 2) 1st Time Homebuyer Credit Repayment
• 3) Unreported Tips (& Social Security/Medicare
Taxes)
• 4) Retirement (taxable amount not determined)
• 5) Sale of Stock
• 6) Sale of Home
• 7) Schedule K-1
• 8) Injured Spouse/Deceased Taxpayer
• 9) Rental Income
• 10) Finishing the Return
• 11) Additional Responsibilities
Rental Income
• Payment received for renting a room or a
home to a tenant is rental income reportable
on Form 1040, Schedule E.
• Gross rental income may:
•
•
•
•
•
Ordinary Rental Payments
Advanced rent
Security deposits
Payments for breaking a lease
Expenses paid by the tenant
• Rental income is OUT OF SCOPE!
Confirm with taxpayer that he/she does not
have rental income before preparing the return.
Estimated Tax Payments
• If taxpayers made estimated tax payments
during the year and/or applied a portion of
last year’s tax return to this year’s return,
enter the total amount directly to Line 63 of
the 1040.
TaxWise Practice – Kent Exercise
• Line 8: Seller-financed Mortgages
• Line 63: Estimated Tax Payments
• Alabama Return
• Direct Deposit Information
Advanced Training
• 1) Credit for the Elderly or Disabled
• 2) 1st Time Homebuyer Credit Repayment
• 3) Unreported Tips (& Social Security/Medicare
Taxes)
• 4) Retirement (taxable amount not determined)
• 5) Sale of Stock
• 6) Sale of Home
• 7) Schedule K-1
• 8) Injured Spouse/Deceased Taxpayer
• 9) Rental Income
• 10) Finishing the Return
• 11) Additional Responsibilities
Finishing the Return
• Quality Review
Run Diagnostics
Run Diagnostics
• Correct all errors and then run the diagnostics
again to make sure all errors were corrected
• Also pay attention to the warnings and
overridden entries
• Do NOT create E-File (ONLY your site
coordinator should do this)
Finishing the Return
• After you run diagnostics:
• Make sure the preparer and quality reviewer names
are listed on the I/I Form
• Note the status of the return on the I/I Form
• Print return (1 if E-Filing & 2 if paper filing)
• Assist with payment (voucher, addressing envelope…)
• Advise taxpayers they are ultimately responsible for
all information provided
• Taxpayer and spouse must sign and date federal and
Alabama returns
• File I/I Form in filing box
• Do NOT keep any personal documents!
Advanced Training
• 1) Credit for the Elderly or Disabled
• 2) 1st Time Homebuyer Credit Repayment
• 3) Unreported Tips (& Social Security/Medicare
Taxes)
• 4) Retirement (taxable amount not determined)
• 5) Sale of Stock
• 6) Sale of Home
• 7) Schedule K-1
• 8) Injured Spouse/Deceased Taxpayer
• 9) Rental Income
• 10) Finishing the Return
• 11) Additional Responsibilities
Additional Duties
• Volunteer organization
• Crowd control
• Appointment confirmation
Volunteer Organization
• Make sure that everyone signs in
• Set a good example
• Place volunteers in stations
• Partner volunteers in such a way that they
are both comfortable and competent
• Keep volunteers busy
• Enforce “Volunteer Etiquette”
Crowd Control
• Make sure each taxpayer signs in at the
door
• Direct taxpayers to the Intake and
Interview forms
• Place taxpayers with available volunteers
Advanced Training
• 1) Credit for the Elderly or Disabled
• 2) 1st Time Homebuyer Credit Repayment
• 3) Unreported Tips (& Social Security/Medicare
Taxes)
• 4) Retirement (taxable amount not determined)
• 5) Sale of Stock
• 6) Sale of Home
• 7) Schedule K-1
• 8) Injured Spouse/Deceased Taxpayer
• 9) Rental Income
• 10) Finishing the Return
• 11) Additional Responsibilities
TaxWise Practice
• https://twonline.taxwise.com/training
• Client ID: 778068
• Last 4 digits of SSN in training: xxx-xx-1689