1. Filing Basics Pub 4012 Tabs A, 1, 14 Pub 17 Intro, Chapter 1 LEVEL 2 TOPIC 4491-03 Filing Basics v1.0 VO.ppt 11/30/20101NJ Training TY2010 v1.0

2. Need To Know Filing status, age & marital situation Is taxpayer a dependent? Blind? All sources of income Excluded or exempt income Whether TP received advanced Earned Income Credit (EIC)? Any withholding or estimated taxes paid Any carry-forward capital losses 11/30/2010 2NJ Training TY2010 v1.0

3. Where To Get T/P Info Intake Sheet Tax Documents Prior Year Return 11/30/2010 3NJ Training TY2010 v1.0

4. Principal Sources Of Income Salaries/Wages Interest and Dividends Sale of Securities-1099B Pensions/IRA Distributions Social Security Benefits 11/30/2010 4NJ Training TY2010 v1.0

5. Filing Requirements (See Pub 4012 Tab A) Pub 4012: Page A-1 11/30/2010 5NJ Training TY2010 v1.0

6. Filing Requirements (See Pub 4012 Tab A) 11/30/2010 6NJ Training TY2010 v1.0

7. Pub 4012, Tab A Chart A - Footnotes If TP turns 65 on Jan 1 of next year considered 65 for prior year When using chart, do NOT include social security benefits unless: You are married filing a separate return and you lived with your spouse at any time during the year, or One-half of your social security benefits plus you other gross income is more than $25,000 ($32,000 if MFJ) MFJ not living with spouse at end of year and had gross income of $3,650 or more, must file regardless of age 11/30/2010 7NJ Training TY2010 v1.0

8. Also Must File If Over $400 of net self employment income Received advance EIC – from W2 box 9 Owe special taxes (unreported tips, household employment, etc) 11/30/2010 8NJ Training TY2010 v1.0

9. Children & Other Dependents Pub 4012: Page A-2 Must File Single dependents under 65 with unearned income over $950 and/or earned income over $5,700 Married dependents - 65 or older or blind See Pub 4012 Tab A 11/30/2010 9NJ Training TY2010 v1.0

10. Who Should File Pub 4012: Page A-3 Claiming refund of withheld taxes or estimated taxes paid Claiming earned income credit Claiming additional child tax credit If TP received 1099B, Sale of Capital Assets 11/30/2010 10NJ Training TY2010 v1.0

11. When Not To File NJ Not a resident (for tax purposes) of New Jersey Adjust State Return box on Main Info screen Do not file NJ 1040 return if ALL of the following conditions exist: Homeowner (not a Tenant) Income below filing threshold No withholdings to be refunded Not eligible for Earned Income Credit (EIC) Click NO on box “Do You Want To Electronically File This Return”, page 3 of NJ return 11/30/2010 11NJ Training TY2010 v1.0

12. MUST/SHOULD FILE QUIZ #1 Miranda, 17, claimed on her parents’ return W-2 shows $2000 in wages and federal tax withheld of $155 Grandparents gave her a $3000 CD as a gift She has no other income Must or should Miranda file? Should: to get back her withholding CD is a gift – not counted in income 11/30/2010 12NJ Training TY2010 v1.0

13. MUST/SHOULD FILE QUIZ #2 Kathy, 22, attends college full time Earned $850 babysitting and had $3000 reported on a W-2; no tax was withheld. Must or should Kathy file? Must: had >$400 in self-employment. If only W-2, would not have needed to file. 11/30/2010 13NJ Training TY2010 v1.0