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2013 – 2014 Campus Fellow Intermediate Training: January Refresher

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1 2013 – 2014 Campus Fellow Intermediate Training: January Refresher

2 Training Outline Basic Level Updates
Social Security and Lump Sum Election Method State Tax Refund Business Income Retirement Income Adjustments to Income Itemized Deductions Intermediate Credits Paper & Amended Returns Additional Topics on 2013 Advanced Test Additional Duties Quality Reviews Campus Fellow Manual Volunteer Paperwork

3 Training Outline Basic Level Updates
Social Security and Lump Sum Election Method State Tax Refund Business Income Retirement Income Adjustments to Income Itemized Deductions Intermediate Credits Paper & Amended Returns Additional Topics on 2013 Advanced Test Additional Duties Quality Reviews Campus Fellow Manual Volunteer Paperwork

4 Due Date of Return Due Date: April 15, 2014

5 Exemptions The amount a taxpayer can deduct for each exemption increased to $3,900 for 2013.

6 Standard Deductions: 2013 MFJ or QW $12,200 Head of Household $8,950
Single or MFS $6,100

7 Training Outline Basic Level Updates
Social Security and Lump Sum Election Method State Tax Refund Business Income Retirement Income Adjustments to Income Itemized Deductions Intermediate Credits Paper & Amended Returns Additional Topics on 2013 Advanced Test Additional Duties Quality Reviews Campus Fellow Manual Volunteer Paperwork

8 Social Security Benefits
Sometimes a taxpayer may receive Social Security payments for previous years Taxpayers can either: Report the amount for the previous years as income for the current tax year (2013) Use the Lump Sum Election Method, and report the amount for the previous years as income for the previous years (and thus pay any taxes on it based on previous years’ income)

9 Lump Sum Election Method
Lump Sum Election Method is out of scope for basic volunteers In order to compute the taxable benefits, you will need copies of the taxpayer’s prior year returns (to get their AGI)

10 Social Security Benefits: SSA-1099
Total benefits Medicare premiums Don’t miss withholding! Lump-Sum Benefit Payments

11 Reporting Lump-Sum Benefits
Option 1: Report the whole payment as it was received Enter the whole payment on the first line (SS received this year) Same step as in Basic Training!

12 OPTION 1: Lump Sum Election Method Link Line 20a  1040 Wkt 1
Social Security received this year Medicare Federal Tax Withheld

13 Reporting Lump-Sum Benefits
Option 2: Separate payments based on year received and record taxable benefits appropriately Only the current year income will be adjusted Do NOT file an amended return Taxpayer can choose 2nd option if it lowers the taxable benefits (TaxWise will automatically determine which is more beneficial)

14 OPTION 2: Lump Sum Election Method Link Line 20a  1040 Wkt 1
Social Security received this year Medicare Federal Tax Withheld Then scroll to the bottom of the sheet

15 OPTION 2: Lump Sum Election Method
Enter the benefits for 2013 on the gross amount received line Click on the amounts taxable from previous years line and type F9 to pull up a Lump Sum Wkt

16 OPTION 2: Lump Sum Election Method
Enter the earlier year for which the benefits were received and the filing status

17 OPTION 2: Lump Sum Election Method
Line 1: Enter the amount of benefits received in prior year and amount for prior year received in current year Line 3: Enter the AGI for prior year

18 Lump Sum Election Method
Step 1: Enter Box 5 total in the Social Security received this year line on 1040 Wkt 1 Step 2: Calculate amount paid for current tax year by subtracting prior years from Box 5 benefits Step 3: Enter in appropriate box at bottom of worksheet Step 4: Link to Lump Sum Wkt from line Amounts Taxable from Previous Years Step 5: Enter pertinent prior year at top of Lump Sum Wkt (e.g., 2012) and check appropriate marital status for that year Step 6: On Line 1, enter amount of benefits received in prior year and amount for prior year received in current year Step 7: On Line 3, enter AGI for prior year Step 8: One Lines 4 and 5, enter adjustments/exclusions and tax-exempt interest amounts for prior year Step 9: Close worksheet; repeat steps 4-8 for additional prior years

19 Training Outline Basic Level Updates
Social Security and Lump Sum Election Method State Tax Refund Business Income Retirement Income Adjustments to Income Itemized Deductions Intermediate Credits Paper & Amended Returns Additional Topics on 2013 Advanced Test Additional Duties Quality Reviews Campus Fellow Manual Volunteer Paperwork

20 2012 State Tax Refund The 2012 State Tax Refund may be taxable and need to be reported Answer question in Box under line 9 If YES, link: Line 10  State Tax Refund Complete the State Tax Refund Wkst with information from 2012 return

21 Info Needed from 2012 Return
State refund amount Schedule A, line 5a: Income Taxes Schedule A, line 5b: General Sales Tax Total itemized deductions amount Filing status Taxable income amount

22 State Tax Refund in TaxWise
Enter in the amount for: State refund amount (line 1) Sch A, line 5a: income taxes (line 2) Sch A, line 5b: general sales tax (line 2)

23 State Tax Refund in TaxWise
Enter in the amount for: Total itemized deductions (line 6) Filing status (line 7) Taxable income amount (line 12)

24 Training Outline Basic Level Updates
Social Security and Lump Sum Election Method State Tax Refund Business Income Retirement Income Adjustments to Income Itemized Deductions Intermediate Credits Paper & Amended Returns Additional Topics on 2013 Advanced Test Additional Duties Quality Reviews Campus Fellow Manual Volunteer Paperwork

25 Business Income Income from personal business or independent contractor Income can be reported on: 1099-MISC W-2 (Statutory Employee) Personal records 1099-K Link: Line 12  Sch C-EZ or C

26 Business Income We can file a Schedule C or C-EZ if the taxpayer meets the following: Cash method of accounting No inventory Does not want to depreciate No net loss Only one business (if taxpayer owns a business) No employees during the year Had business expenses of less than $10,000 Schedule C-EZ less than $5,000 Schedule C up to $10,000

27 1099-MISC Box 7 “Nonemployee Compensation”

28 1099-MISC Income reported in Box 7 on a 1099-MISC is considered self-employment income and should be reported on a Schedule C-EZ or Schedule C Link: Line 12  Sch C-EZ or Sch C Then, Link: Gross Receipts Line  1099-MISC

29 1099-MISC ONE MORE TIME: Income reported in Box 7 on a 1099-MISC is considered self-employment income and should be reported on a Schedule C-EZ or a Schedule C

30 Schedule C-EZ and Schedule C
Net profit = Gross Receipts – Expenses Deductible expenses Advertising Insurance Interest Legal and professional services Repairs 50% of business entertainment Utilities Vehicle expenses (additional information needed for Part III of the C-EZ or Part IV of the C, Pg. 2) See your campus fellow manual Tab 5 for more details

31 Business Mileage Rates
If used for business purposes, taxpayers can receive a mileage deduction at the federal rate Cannot deduct commuting miles Cannot calculate depreciation (out of scope) For 2013, the following rate is in effect: 56.5 cents per mile On Sch C-EZ and Sch C, enter total miles

32 Business Income Line F (Sch C-EZ) or Line I (Sch C)
Did the business make any payments in 2013 that would require filing of Form(s) 1099? Line 1 (Income) structured differently: 1a: Merchant card and third party payments (for 2013 enter -0-) 1b: Gross receipts or sales not entered on line 1a 1c: Income reported to you on Form W-2 (if the “statutory employee” box on that form was checked) 1d: Total gross receipts

33 Schedule C in TaxWise: Income
1a: Merchant card & third party sales 1b: Gross receipts on on 1a 1c: Income reported on W2 if the “statutory employee” box is checked 1d: TaxWise calculates total gross receipts

34 Schedule C in TaxWise: Expenses
Enter in the amounts for the qualified business expenses

35 Schedule C in TaxWise: Vehicle Expense
Enter in the amounts and answer the questions TaxWise carries over the mileage for you

36 Schedule C-EZ in TaxWise
Enter in the business information

37 Schedule C in TaxWise: Income & Expenses
1a: Merchant card & third party sales 1b: Gross receipts on on 1a 1c: Income reported on W2 if the “statutory employee” box is checked 1d: TaxWise calculates total gross receipts 2: Total expenses (Link to a scratch pad)

38 Self Employment Tax Must file Schedule SE if self-employment earnings are over $400 Covers Social Security and Medicare taxes Complete Schedule C or C-EZ first TaxWise automatically calculates the tax onto Line 56

39 Training Outline Basic Level Updates
Social Security and Lump Sum Election Method State Tax Refund Business Income Retirement Income Adjustments to Income Itemized Deductions Intermediate Credits Paper & Amended Returns Additional Topics on 2013 Advanced Test Additional Duties Quality Reviews Campus Fellow Manual Volunteer Paperwork

40 Types of Retirement Plans
Pension: A series of payments for past work Annuity: A series of payments from a contract with a company, trust, or individual 401(k) Plan: The 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)

41 Form 1099-R

42 Taxable Portion of Distributions
Depending on employee contributions, income from retirement plans can be: Fully Taxable if: Employee did NOT contribute (all $ came from employer) Employee contributed with before-tax money Partially Taxable if: Employees contributed part of funds with after-tax money Not Taxable if: Employee made ALL contributions with after-tax dollars (i.e. Roth IRAs)

43 FIND YOUR SITE COORDINATOR
Important Note You can only prepare returns for retired individuals ONLY if the taxable amount of the retirement distribution has already been determined If Box 2a is empty, FIND YOUR SITE COORDINATOR

44 Lines 15/16: Retirement (Form 1099-R)

45 Railroad Retirement Plans
RRB 1099 Treated like SSA-1099 (social security benefits) RRB-1099-R Treated like 1099-R (pension)

46 Rollover (Tax-Free Distribution) (Code G will be in Box 7 of the 1099-R)
Enter the amount the taxpayer rolled over Check the Box and type F9 Provide an explanation

47 Defined Benefits Retirement Plans
IF IT IS A DEFINED BENEFITS PLAN, CLICK BOX 1 ON THE BOTTOM OF THE 1099-R IN TAXWISE

48 Defined Benefits & Defined Contributions
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.

49 Alabama Tax Rules Defined Benefits Plan: A promised benefit is based on a formula in the plan, often using a combination of the employee’s age, years worked for the employer, and/or salary Contributions from employee, employer, or both. Employer bears investment risk. Defined Contributions Plan: The benefit depends on contributions made by the employee and/or the employer, performance of the account’s investments, and fees charged to the account. Employee bears investment risk.

50 Alabama Tax Rules Defined Benefits Plans are NOT taxable at the Alabama level. To find out if a plan is Defined Benefits or Defined Contributions Consult online list (www.impactalabama.org) or your Campus Fellow Manual Call the company that administers the plan Call the IRS See Tab 5 in your Campus Fellow Manual for more info at the tax site Hint: All retired civil servants (i.e. teachers, city employees, soldiers, etc) have Defined Benefits plans

51 IF IT IS A DEFINED BENEFITS PLAN, CLICK BOX 1 IN TAXWISE
Alabama Tax Rules IF IT IS A DEFINED BENEFITS PLAN, CLICK BOX 1 IN TAXWISE

52 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?

53 All civil servants will have a defined benefits 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 All civil servants will have a defined benefits plan.

54 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?

55 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

56 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

57 Training Outline Basic Level Updates
Social Security and Lump Sum Election Method State Tax Refund Business Income Retirement Income Adjustments to Income Itemized Deductions Intermediate Credits Paper & Amended Returns Additional Topics on 2013 Advanced Test Additional Duties Quality Reviews Campus Fellow Manual Volunteer Paperwork

58 Adjustments to Income Decreases Taxable Income
Found on lines of Form 1040 Educator Expenses Half of Self-Employment Tax Early Withdrawal Penalty Alimony IRA (traditional) Contributions Student Loan Interest College Tuition Payments Jury Duty

59 Educator Expenses Eligible Educators: Qualified Expenses (up to $250):
K-12 teacher, instructor, counselor, principal, or aide Worked at least 900 hours Qualified Expenses (up to $250): Ordinary and necessary amounts Books Supplies Equipment

60 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.

61 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 if you have completed a Schedule C-EZ or a Schedule C.

62 Penalty on Early Withdrawal of Savings
TaxWise will automatically calculate from information on the Interest Statement TaxWise automatically calculates the adjustment on Line 30 Make sure you entered in ALL interest and penalties imposed correctly on the Schedule B Important: Make sure you have entered in ALL interest received AND penalties imposed for early withdrawals on the Interest Statement of Schedule B

63 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 and recipient’s SSN on Line 31

64 IRA Contributions Deduction
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

65 IRA Deduction: Deductible Contributions
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

66 IRA Deduction: Joint Returns
If the taxpayers file a joint return and one spouse’s compensation is greater than the other’s: Married taxpayers’ combined contributions cannot exceed combined compensation Neither spouse can contribute more than $5,000 ($6,000 if > age 50)

67 IRA Deduction: Allowable Deduction
The allowable deduction may be adjusted based on Filing status Income Whether or not the taxpayer/spouse is covered by an employer retirement plan

68 IRA Deduction: Penalties
Taxpayers may incur penalties for Excess contributions Early withdrawals Too little withdrawals

69 IRA Deduction: Excess Contribution
Contributions for 2013 can be made up until the due date of the return (i.e. April 15, 2014). An excess contribution above these 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 professional preparer!

70 IRA Deduction: Link: Line 32  IRA Wkt

71 Student Loan Interest Up to $2,500 of interest paid on loan in the name of a: Taxpayer Spouse Dependent (when the loan was obtained) Note: Student must have been enrolled at least half-time in a program leading to a degree, certificate, or other credential

72 Student Loan Interest: Eligibility
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 MFS Able to be claimed as a dependent If the taxpayer cannot be claimed as a dependent but her parents paid the student loan interest, the student can claim the deduction

73 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 Only out-of-pocket expenses can be claimed; you must subtract amounts paid with scholarships and grants

74 Tuition and Fees Deduction
Taxpayers can deduct up to $4,000 in qualified tuition and related expenses; NOT BOOKS Link: Line 34  1040 Wkt2

75 Student Loan Interest: Qualified Expenses
Qualified expenses include tuition and fees required for enrollment, usually reported on a 1098-E Expenses that do not qualify: room and board, transportation, books, and supplies Must be reduced by scholarships, employer-provided benefits, or tax-free education expenses

76 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 Line 35, Jury duty pay you gave to your employer.

77 Training Outline Basic Level Updates
Social Security and Lump Sum Election Method State Tax Refund Business Income Retirement Income Adjustments to Income Itemized Deductions Intermediate Credits Paper & Amended Returns Additional Topics on 2013 Advanced Test Additional Duties Quality Reviews Campus Fellow Manual Volunteer Paperwork

78 Itemized Deductions Every taxpayer can take a specific amount for a “standard” deduction Reduces taxable income There are certain designated expenses that a taxpayer can choose to list out separately, and, if they total more than the standard deduction, the taxpayer will “itemize” his deductions Reduces taxable income by a greater amount

79 When to Itemize A taxpayer can receive a larger deduction by itemizing if he/she has: At the Federal Level (higher standard deduction): Home mortgage payment Large number of medical bills At the State Level (lower standard deduction): Expenses that may/may not have been sufficient to justify itemization on the federal level Reported on Schedule A 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

80 Qualifying Expenses Unreimbursed Medical Expenses
Charitable Contributions Taxes Home Mortgage Interest Miscellaneous Deductions

81 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

82 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 NOTE: For a complete listing of deductible and nondeductible expenses see Pub 502 on the IRS website

83 Nondeductible Medical Expenses
Life insurance policy premiums Funeral, burial, cremation costs Unnecessary cosmetic surgery Nonprescription drugs NOTE: For a complete listing of deductible and nondeductible expenses see Pub 502 on the IRS website

84 Medical Expenses in Taxwise (Click on the A Detail in the Loaded Forms Menu)
Enter in the amounts for: Medical miles Insurance Medicare (carries over from 1040 Wkt 1) Other medical expenses (prescriptions, glasses, etc.)

85 Charitable Contributions
Non-qualifying Organizations: Qualifying Organizations: Business Religious Civic/Political Charitable Social Educational Foreign Scientific Homeowners' Associations Literary

86 Charitable Contributions
Deductible Items: Monetary donations Fair market value (FMV) of clothing, furniture Uniforms required to be worn during service Unreimbursed transportation expenses IMPORTANT: The taxpayer must keep receipts!

87 Charitable Contributions
Nondeductible Expenses: Raffle, bingo, lottery tickets Tuition Value of time of service Blood Contributions to individuals The FMV of any good received in exchange for a donation (i.e. t-shirts, cds, tote bags, etc.)

88 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

89 Taxes Deductible Nondeductible
Taxes imposed on and paid by the taxpayer in 2013 Nondeductible Taxes the taxpayer pays for someone else Taxes someone else pays for the taxpayer Taxes not paid during 2013

90 Taxes Deductible Nondeductible State and local taxes Federal taxes
Real estate taxes (Property Tax) Hunting licenses Water/sewer State and local taxes on a new car purchase Taxes on alcohol, tobacco, or gas Ad valorem tax on car tags (total paid - $24.50) Utilities

91 Taxes Paid in TaxWise (Click on the Schedule 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 before entering (8)

92 Taxes Paid in TaxWise (Click on the Schedule A in the Loaded Forms Menu)
TaxWise automatically chooses 5a or 5b: 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

93 Home Mortgage Interest

94 Home Mortgage Interest in TaxWise (Click on the Schedule A in the Loaded Forms Menu)
Enter the amounts for: Home mortgage interest and points (10) Mortgage insurance premiums (13)

95 Nondeductible Interest
Personal interest personal loans car loans credit cards etc.

96 Miscellaneous Deductions
Union dues Uniforms (that cannot be worn in any other circumstance) Professional books, journals Employment-related educational expenses Expenses for looking for a new job Tax preparation fee from last year Safe deposit box Gambling losses up to amount of winnings

97 Miscellaneous Deductions in TaxWise (Click on the Schedule A in the Loaded Forms Menu)
Enter the amounts and descriptions for: Employment: job travel, union dues, job education, literary journal for work, educator expenses (21) Tax prep fees (22) Safe deposit box (23) Miscellaneous: literal journal not for work, gambling losses from W2-G (28)

98 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

99 Training Outline Basic Level Updates
Social Security and Lump Sum Election Method State Tax Refund Business Income Retirement Income Adjustments to Income Itemized Deductions Intermediate Credits Paper & Amended Returns Additional Topics on 2013 Advanced Test Additional Duties Quality Reviews Campus Fellow Manual Volunteer Paperwork

100 Education Credits Offset higher education expenses paid during the year The student can be taxpayer, spouse, or a dependent Partially Refundable Two types of credits available: American Opportunity Credit Lifetime Learning Credit

101 Education Credits: Eligibility
Filing status cannot be MFS Qualified expenses paid by taxpayer CAN claim on the basis of expenses paid with student loans Accredited institution Taxpayer or student will often receive Form 1098-T

102 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

103 American Opportunity (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

104 Education Credits: Form 1098-T

105 Education Credits: American Opportunity Credit
40% (up to $1,000) is refundable (unless the taxpayer claiming the credit can be claimed as a dependent by his/her parent) Qualified expenses include “Course materials” (any required books and supplies, whether available in regular bookstores) Remember, room and board is never a qualified expense.

106 Qualified Expenses for Credit
American Opportunity (Hope) Credit Qualified tuition and related expenses 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 1

107 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?

108 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

109 Practice LaQuandra is a sophomore enrolled at UAB full-time. 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?

110 Practice LaQuandra is a sophomore enrolled at UAB full-time. 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 or Lifetime Learning Credit Qualified expenses = $6,000

111 Education Credits: No Double Benefits
The taxpayer CANNOT claim Both the American Opportunity (Hope) and Lifetime Learning credits for the same qualified tuition expenses 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)

112 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 Line 47

113 Residential Energy Credit
Nonrefundable credit Available to a taxpayer who made purchases for qualified energy efficient improvements for his main home who owns his home

114 Residential Energy Credit
Use Form 5695, Part I Eligible expenses include high-efficiency heat pumps, air conditioners, and water heaters; energy-efficient windows, doors, insulation materials, and certain roofs

115 Residential Energy Credit
Non-Business Energy Property (home improvements) Heating, ventilating, air-conditioning, insulation, roofs water heaters (non-solar), windows, and doors. Part I 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 II of the 5695 (OUT OF SCOPE)

116 Residential Energy Credit Link: Line 52  5695 Pg. 1
Fill in 1a, b, and c

117 Residential Energy Credit
Line 2: Enter any amounts claimed in the previous 4 years Line 3 (Qualified energy efficiency improvements): 3a: Insulation 3b: Exterior doors 3c: Roof (metal or asphalt) 3d: Exterior windows /skylights

118 Residential Energy Credit
Line 6 (Residential energy property costs): 6a: Electric heat pump, central air conditioner, water heather 6b: Natural gas, propane or oil furnace, hot water boiler 6c: Main air circulating fan used in natural gas, propane or oil furnace

119 Residential Energy Credit
Taxpayers MAY qualify for an energy credit for qualified solar electric property costs solar water heating property costs small wind energy property costs geothermal heat pump property costs. Important: This is outside scope of VITA

120 Training Outline Basic Level Updates
Social Security and Lump Sum Election Method State Tax Refund Business Income Retirement Income Adjustments to Income Itemized Deductions Intermediate Credits Paper & Amended Returns Additional Topics on 2013 Advanced Test Additional Duties Quality Reviews Campus Fellow Manual Volunteer Paperwork

121 Paper Returns: When to Mail
Situations in which a return CANNOT be e-filed: A dependent has been claimed incorrectly by another taxpayer on a previous return. The taxpayer has been incorrectly claimed as a dependent on a previous return. A taxpayer files MFS but does not know his spouse's SSN. Note: Sometimes, tax returns cannot be e-filed OR the taxpayer simply prefers to mail the return.

122 Preparing Paper Returns in TaxWise
To set up the return to be filed as a paper return: Federal: On the Main Info Sheet, scroll midway down and click “Paper” next to Type of Return. State: On the AL40, scroll to the bottom and click “No” stating that you do NOT want to e-file the return.

123 Preparing Paper Returns in TaxWise
Prepare the return as you would normally. Print two copies of everything – give one to the taxpayer to keep and one copy to mail. Have the taxpayer sign the 1040 and the AL40.

124 Paper Returns: Final Notes
Paper returns take much longer to process than e-filed returns. Refunds can still be directly deposited on a paper return – just include this information in TaxWise.

125 Amended Returns Once a tax return has been accepted by the IRS, it cannot be changed without submitting an amended return A taxpayer should amend his return if Anything was excluded that affects taxable income OR Tax liability OR If anything was reported incorrectly

126 Amended Returns Common reasons returns must be amended:
Taxpayer receives another W-2 Taxpayer remembers another source of income Taxpayer wants to add itemized deductions A dependent was mistakenly claimed

127 Amended Returns If we completed the return, you will be able to pull it up in TaxWise to amend it. If someone else completed the return, you will need to re-key the original return that was submitted (exactly as it was submitted) before you can amend it.

128 Amended Returns: First Steps
BEFORE MAKING ANY CHANGES TO THE RETURN Add a 1040X IMPORTANT: On the 1040X, click the check-box that says “Check this box to override” If the AL return must be amended, click the box at the top of the AL40 that says “Amended Return”

129 Amended Returns: Making Changes
Once you check the appropriate boxes on the 1040X and the AL40, make any needed changes to the tax return Add a new W-2 Add or take off a dependent Change filing status Etc. All changes will be recorded on the 1040X

130 Amended Returns: Important Lines
Line C: explains what changes are being made to the tax return and why Line 15: indicates if the taxpayer already made a payment Note: A new amount owed or refunded will be listed once ALL changes are made

131 Amended Returns: Filing
Amended returns cannot be e-filed. Print 1040X and AL40 and any new schedules that have been added (if applicable) Include documentation of changes (if necessary – e.g., a new W-2).

132 Amended Returns: Final Notes
Print the ENTIRE pdf for the taxpayer's records (e.g., the 1040X and the resulting 1040 after changes). Warn the taxpayer that it may take weeks for the IRS to process an amended return. Refer the taxpayer to if they have further questions about when the return will be processed.

133 Practice Complete the Fleming exercise on your own
Twonline.taxwise.com/training Client ID: User Name: all caps, last name then first initial, e.g. Seth Nelson NELSONS Password: user set OR if password gets reset, password will be same as username

134 Training Outline Basic Level Updates
Social Security and Lump Sum Election Method State Tax Refund Business Income Retirement Income Adjustments to Income Itemized Deductions Intermediate Credits Paper & Amended Returns Additional Topics on 2013 Advanced Test Additional Duties Quality Reviews Campus Fellow Manual Volunteer Paperwork

135 Additional Topics on 2013 Advanced Test
Pull out your “Helpful Tips for Additional Topics on the 2013 Advanced Test” packet The following topics will appear on the 2013 Advanced Certification Exam BUT will be out of scope for you at the tax site. Campus Fellows = SaveFirst Intermediate Level The following topics MUST be performed by an Impact Site Coordinator (or SaveFirst Advanced Level) at the site. Capital gains (sale of stock, capital loss carryover) Retirement Income with Taxable Amount Not Determined Schedule K-1: Interest Income, Royalty Income

136 Sale of Stock Sale of stock = Capital Gains
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.

137 Inherited property is ALWAYS long-term
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 or less Long-term: held for more than one year Inherited property is ALWAYS long-term

138 Reporting Income from Sale of Stock
Line 13 (if short-term) Sch D Pg 1 8e, 9e or 10e 1e, 2e or 3e 8949 Pg 1 3a 1a Cap Gn Wkt Line 13 (if long-term)

139 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).

140 Reporting Carryover Losses: Schedule D

141 Retirement Income: Taxable Amount Not Determined
Simplified Method Calculates tax-free portion of each pension or annuity payment Calculates taxpayer’s cost basis for each monthly payment Basis – amount the taxpayer paid in to the plan that is being distributed in each monthly payment Taxpayer’s cost basis = Monthly Tax-Free # of monthly payments Portion

142 Simplified Method Enter in the amounts for:
Cost in plan at start date from 9b of 1099-R (line 1) 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)

143 Simplified Method TaxWise Calculates:
Line 3 Exclusion per month Line 6 Exclusion Automatically pulls through to Line 16b on 1040. Do NOT fill in box 2b on 1099-R – it should remain blank.

144 Schedule K-1: Interest & Royalty Income
Reports the taxpayer’s share of income or distributions from partnerships, S Corporations, and some estates & trusts Some interest income and royalty income is reported on a Schedule K-1

145 Reporting Income from Schedule K-1
Type of Income Taxable Interest Income Royalties Where to Report 1040 Line 8a  Sch B  Line 1b  Interest Stmt (same as interest income from 1099-INT) 1040 Line 17  Sch E Pg 1  1*C  K1 P/S Pg 1  Line 7/6 (use code 6 in Part 1)

146 Practice Let’s complete practice scenarios 1 and 2 in your “Helpful Tips” packet together You should use this packet and these exercises as a guide for the advanced topics when completing the certification exam

147 Training Outline Basic Level Updates
Social Security and Lump Sum Election Method State Tax Refund Business Income Retirement Income Adjustments to Income Itemized Deductions Intermediate Credits Paper & Amended Returns Additional Topics on 2013 Advanced Test Additional Duties Quality Reviews Campus Fellow Manual Volunteer Paperwork

148 Additional Duties Quality Review Volunteer organization Crowd control
Appointment confirmation Paperwork

149 Quality Review We must thoroughly quality review EVERY RETURN (E-file and Paper) Campus Fellows may assist Site Coordinators to conduct Quality Reviews USE TAB 4 IN YOUR CAMPUS FELLOW MANUAL FOR ALL QUALITY REVIEWS!

150 Volunteer Organization
Make sure that everyone signs in (Campus Fellows: set a good example!) Place volunteers in stations Partner volunteers in such a way that they are both comfortable and competent Keep students busy! Enforce “Volunteer Dos and Don'ts”

151 Crowd Control Make sure each taxpayer signs in at the door
Direct taxpayers to the Intake and Interview Forms Place taxpayers with available volunteers

152 Appointment Confirmation
Talk to the Site Coordinator about assisting with day-before appointment reminder calls Call all appointments 24 hours before Identify Self and Organization (you may need to say “the tax people”) Confirm appointment time (make a note if the taxpayer mentions he/she might be late) Remind the taxpayer to bring Social Security Cards, W2s, and other tax forms; if filing jointly, spouses both need to come in Call taxpayers who do not show up for appointments to reschedule See script on Pg. 6 in your Campus Fellow Manual

153 Paperwork Requirements
Items for TAXPAYER (AND SPOUSE) to complete DURING the return: INPUT pin # for Main Information Page in TaxWise Confirm “I authorize” selection on Federal Form 8879 Confirm “I authorize” selection on Alabama Form 8453 INPUT pin # on consent to use form (“Gen Use” in TaxWise) INPUT pin # on consent to disclose form (“Gen Disclose” in TaxWise)

154 Paperwork Requirements
Forms to print for an E-file return: 1 copy of the entire return for the taxpayer’s records (including copy of 8879 and 8453) Extra Form 8888, if applicable Forms for taxpayer to complete/sign: Federal form 8879* Alabama form 8453* Consent to use/disclose forms ONLY IF volunteer enters pin # on consent to use in Taxwise for taxpayer SNWL paperwork, if applicable Note: These signed forms are then given back to the taxpayer for their records. We keep electronic copies only.

155 Paperwork Requirements
Forms to retain for our records: Completed Intake/Interview & Quality Review Sheet Signed copies of consent to use form and consent to disclose form ONLY IF volunteer enters pin # on consent to use/disclose forms for taxpayer Completed SNWL paperwork and Form 8888, if applicable

156 Assisting the Site Coordinator
Always ask the Site Coordinator if there is anything you can do to help her/him!

157 Training Outline Basic Level Updates
Social Security and Lump Sum Election Method State Tax Refund Business Income Retirement Income Adjustments to Income Itemized Deductions Intermediate Credits Paper & Amended Returns Additional Topics on 2013 Advanced Test Additional Duties Quality Reviews Campus Fellow Manual Volunteer Paperwork

158 Understanding the Intake/Interview Form and Conducting a Thorough Quality Review for Every Taxpayer

159 Required for Use by IRS VITA Sites
An important tool for accuracy and due diligence! Must be completed by (or with) the taxpayer. Must be used to conduct the Quality Review process. Must be used when e-filing tax returns. Must be kept on file in our site records.

160 The Intake Process: Completing Form 13614-C
In most cases, the taxpayer completes pages 1 and 2 of the Intake Interview Form (Form C) in the waiting room before meeting with a tax preparer. Provide assistance as needed

161 Complete an Intake/Interview Form for Every Return
We MUST have an intake/interview form on file for EVERY return filed at our tax sites. If multiple/prior year returns: Go to IRS.gov and print out the Intake/Interview form from that tax year Complete an intake/interview form for EVERY year for which the taxpayer is filing

162 The Intake Process: Return and Volunteer Certification Levels
It is a violation of our VITA Grant and IRS Compliance and your Volunteer Standards of Conduct Agreement to file a tax return that is out of scope of the VITA tax site. At SaveFirst sites, to ensure all returns are in-scope for VITA: Consult the Scope of Service Chart – at every tax station, in the Pub 4012 Volunteer Resource Guide, and in your Campus Fellow Manual If a topic seems complicated or unfamiliar to you, double-check the Scope of Service Chart to be sure it is listed in scope. Sometimes this determination may be unclear. If you are unsure, ask your supervisor.

163 The Intake Process: Return and Volunteer Certification Levels
Remember, SaveFirst volunteers are following slightly different scopes than the IRS’s levels of certification. Reference your SaveFirst Scope of Service chart in your Campus Fellow Manual, pgs if you have questions Remember: Campus Fellows are Intermediate Level Volunteers

164 If part of a taxpayer’s return will be out of scope for the volunteer preparer, but will be in scope for you, the site coordinator, or your Campus Fellows, then if you are busy you may have the volunteer begin the return and stop when they have completed all of the topics within their scope.

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186 Review Tab 4 pages 22-26 in your Campus Fellow Manual as we go over the Quality Review process.
Turn to Tab 4, pages in your Campus Fellow Manual for the “Process for Conducting a Thorough Quality Review”

187 For every quality review, you will use the Intake/Interview sheet, page 3. You will go through the checklist on that sheet and mark that you have confirmed each step of the quality review. However, you will find that the Quality Review process as outlined on page 3 is not thorough enough to catch many of the common errors you will find on a tax return. Tab 4 of your Campus Fellow Manual has a more comprehensive guide for what you should do for each question on the Quality Review Checklist on the Intake/Interview Form C. You should follow this checklist in Tab 4 for EVERY quality review!!

188

189 Before you start the quality review…
Introduce yourself to the taxpayer and explain you are going to review the volunteer’s work prior to electronically filing the return. Ask the taxpayer if they have any questions or concerns about the return as the volunteer prepared it. Pay close attention to the response: if a taxpayer is concerned about the size of the refund, make a note so you can look out for any errors that could have affected the size of the refund. Look at pages 1-2 of the Intake sheet. If every question is not completely filled out, ask the volunteer to finish the interview and enter in any additional information before you conduct the quality review. As you review the Intake sheet, make a mental note of all the items you will be looking for in TaxWise.

190 BEFORE you get started: have the Campus Fellows open their books to Tab 4 of the Campus Fellow Manual and make corrections to the numbering. At bullet point 6e, thy should underline “Personal and Dependency Exemptions” and write #7 out to the left. Points F through J should be subpoints of #7 Personal and Dependency Exemptions. Then they should Change “All Income…” to #8, change “Adjustments..” to #9, “Standard, Additional, or Itemized Deductions….” to #10, “All Credits…” to #11, “Withholding…” to #12, and “Direct Deposit…” to #13.

191 The certification levels of this tax return and volunteer preparer were verified.
Check the volunteers’ ID badges for certification levels. (Remember to confirm the SaveFirst volunteer levels and not just the IRS volunteer levels. SaveFirst volunteer levels will be indicated on their ID badges.) Confirm on the Intake Sheet whether non-basic issues appeared. If so, confirm that an Intermediate-level or, as needed, an Advanced-level preparer worked on those parts of the return. The quality reviewer should have at least an Intermediate level of certification. A quality reviewer with advanced level of certification is required for returns that contain Advanced level topics.

192 All unsure boxes were discussed with the taxpayer and correctly marked yes or no.
Confirm that all boxes have an answer and were not left blank. Often a taxpayer may accidentally miss one of the questions. If any boxes are still marked unsure, ask the taxpayer about the item in a very clear, explanatory manner to find out if you need to mark yes or no. As you go through the return, if you notice that an item was incorrectly marked yes or no, you should correct the answer on the Intake/Interview form for our records.

193 The information on pages one and two was correctly addressed and transferred to the return.
This step will be complete once you follow steps 4-13 below.

194 Taxpayer’s identity has been verified and address and phone numbers are correct.
You will do this along with completing Step 5. See instructions below.

195 Names, SSNs, ITINs, and EINs, were verified and correctly transferred to the return.
Check the photo ID of the taxpayer and spouse. Verify the information on the Intake sheet by looking at the TaxWise Main Information Sheet. Ask the taxpayer to look at the computer screen with you as you confirm the following information: Spelling of Taxpayer & Spouse Names Mailing Address Dates of Birth Phone Numbers (make sure any and all numbers are listed) Be sure to double-check the social security cards of everyone who appears on the return. Names and numbers must match the cards exactly – including middle initials – or the return will be rejected.

196 Filing status was verified and correct.
Confirm with the taxpayer and volunteer that the Pub 4012 was used in determining dependency exemptions. If it was not, you must take a few minutes to go through the decision tree to determine dependency eligibility and remind the volunteer that this is an IRS requirement. You should know enough about the taxpayer’s situation by reviewing the Intake sheet to have a good sense of the filing status. You can briefly double-check the decision tree if the filing status isn’t obvious. If anything about the decision seems complicated, you should consult the Pub 4012 decision tree/questions again. If single, confirm the taxpayer wasn’t married during the tax year. If Head of Household, confirm the taxpayer paid more than 1/2 of the costs of keeping up the home. Also, confirm that if married, s/he did not live with spouse for the last six months of the year. Confirm the filing status on the Alabama return. If Head of Household, confirm if the taxpayer is correctly listed as Head of Family or Single by double-checking that the taxpayer was not considered married. If MFJ or MFS in a same-sex couple marriage, confirm HoH or Single status is correctly listed.Personal and Dependency Exemptions are entered correctly on the return. Check Line 6 on the 1040 for the exemptions listing. Quick check for verification of personal exemptions: (1) If over age 24 and not disabled, cannot be a qualifying child; (2) if earned more than the exemption amount, cannot be a qualifying relative. If either of these cases is not met, you will need to ask a few more questions to determine if the taxpayer can be claimed as a dependent (ex., Did someone else pay more than half of your expenses for the year?) Remember that if the taxpayer cannot claim an exemption for themselves because they can be claimed as a dependent, this box must not be checked for the taxpayer. To confirm dependency status, ask the following: Is there another adult living in the home? What is that other adult’s relationship to the child? Could the other adult be claimed as a dependent? Is there a divorce or other legal agreement allowing another adult to claim the child?

197 Personal and Dependency Exemptions are entered correctly on the return.
Check Line 6 on the 1040 for the exemptions listing. Quick check for verification of personal exemptions: (1) If over age 24 and not disabled, cannot be a qualifying child; (2) if earned more than the exemption amount, cannot be a qualifying relative. If either of these cases is not met, you will need to ask a few more questions to determine if the taxpayer can be claimed as a dependent (ex., Did someone else pay more than half of your expenses for the year?) Remember that if the taxpayer cannot claim an exemption for themselves because they can be claimed as a dependent, this box must not be checked for the taxpayer. Confirm with the taxpayer and volunteer that the Pub 4012 was used in determining dependency exemptions. If it was not, you must take a few minutes to go through the decision tree to determine dependency eligibility and remind the volunteer that this is an IRS requirement. To confirm dependency status, ask the following: Is there another adult living in the home? What is that other adult’s relationship to the child? Could the other adult be claimed as a dependent? Is there a divorce or other legal agreement allowing another adult to claim the child?

198 All Income (including income with or without source documents) checked “yes” in section A, part III was correctly transferred to the tax return. Compare W‐2s , 1099s and other income documents with what is recorded in TaxWise. Confirm all amounts are listed on the forms in TaxWise. The 1099‐MISC with amount in Box 7 should be reported on a Schedule C or Sch C‐EZ . If there is a loss or if expenses exceed $10,000, this return is out of scope for out VITA tax site. If the taxpayer has a 1099‐R , confirm that the volunteer has determined if it is a defined benefits plan by checking the list or calling the customer service number of the plan administrator. If it is a defined benefits plan, Box 1 must be checked in TaxWise (lower left). If it is defined benefits, it will not be taxable on the Alabama state return, but you will need to list this amount on the AL-40 as income not appearing on the state return. Double-check that if a taxpayer is disabled and received a 1099-R with Code 3 that the appropriate box is checked on the 1099-R in TaxWise. When checking income documents, be sure to confirm that withholding and the Employer’s Federal ID Number (EIN) are correctly reported.

199 Adjustments to Income are correctly reported.
Check Educator Expenses, Alimony paid, IRA Deduction for contribution to traditional IRA, Student Loan Interest, Tuition and Fees Deduction, jury duty pay given to employer. Confirm the amounts listed on the forms linked from the 1040 are accurate based on the taxpayer’s records and documents and that the amounts have been listed in the appropriate lines. Note that either the Tuition and Fees Deduction or an Education Credit can be claimed per person. You cannot claim both for the same person. If the Tuition and Fees Deduction has been entered in TaxWise, ask more questions about why the Education Credit was not utilized. If the taxpayer does not seem to know, you should ask the volunteer. If the taxpayer qualifies for a credit, you may need to re-enter the information to determine if the education credit would be more beneficial than the deduction.

200 Standard, Additional or Itemized deductions are correct.
Review the deductions that have been entered for accuracy. Check the Sch A, even if it is not pulling through to the federal return, for any amounts that were listed to confirm the information was entered correctly. Remember that these amounts may still pull through to the state return. Confirm with the taxpayer that they did not have any other itemizable expenses, such as out-of-pocket medical expenses or prescriptions, tax preparer fees, charitable contributions, mortgage interest or insurance premiums, real estate taxes or ad valorem car tax. Note that mortgage insurance premiums do not always appear on the 1098 statement. Confirm with the taxpayer whether they paid mortgage insurance premiums and make sure this is recorded on the proper line. (Note that homeowner’s insurance for fire, flood, or theft, etc., is not the same as mortgage insurance premiums, or MIP.)

201 All credits are correctly reported.
These include the Earned Income Tax Credit, Education Credits, the Child & Dependent Care Credit, the Retirement Savings Contribution Credit, the Foreign Tax Credit, and Residential Energy Credits. Confirm all amounts that have been entered against the taxpayer’s documents and records. Double-check qualified education expenses were calculated and listed correctly. If a taxpayer is not receiving the EITC or Child Tax Credits, do a quick mental evaluation of whether that seems right. If you think perhaps they should be getting those or that the amount should be higher, double-check that the correct boxes were checked in the Interview portion of TaxWise for dependent information and that the appropriate worksheets have been completed accurately.

202 Withholding shown on Forms W-2, 1099 and Estimated Tax Payments are correctly reported.
You should have checked withholding when reviewing Income documents. Ask: Did you make any estimated tax payments during the tax year? This means money that you sent to the federal government over and above what was already taken out of your paycheck.

203 Direct Deposit/Debit and checking/saving account numbers are correct.
You should compare these numbers to the check and also ask the taxpayer to do the same. Double-check information entered on the 8888. Double-check information entered on both the federal and state returns.

204 The correct SIDN is shown on the return.
This should be provided to you by the site coordinator. It can be found at the bottom of the Main Information Sheet. The correct site location should be listed here next to the SIDN.

205 The taxpayer(s) was advised that they are responsible for the information on their return.
Tell this to the taxpayer. After you complete the quality review... If the taxpayer is still concerned with the size of the refund, be sure to discuss with the taxpayer what might have changed from last year to this year to affect the size of the refund. Ask to see last year’s return in order to compare numbers if the taxpayer is still concerned or confused. If they came to a SaveFirst site last year, you can pull this up in prior year TaxWise. Make sure the taxpayer understands what to do if they owe a balance. If you have time, once the return is printed, go through the 1040 pages 1 and 2 and give a brief explanation of what their tax return says, including the following: Show them the income section and state how much money they earned for the year. Show them any adjustments that were taken and explain that adjustments help reduce the amount of income they will be taxed on. Point out their “AGI,” or “adjusted gross income.” Show that the standard deduction (or itemized deductions) and exemptions also reduce the amount of income they will be taxed on. Compare their taxable income to their total earned income to drive home this point. Show the amount of tax that they owe, and then explain that their withholding during the year covers this amount. Show them any tax credits they took and how that affected the tax owed or refund amount. Thank the taxpayer for coming in and hand him or her a few postcards advertising the site. Request that he or she give these to friends and family. Remind the taxpayer to come back next year.

206 Let’s Conduct a Quality Review!
With a partner, complete a thorough Quality Review of each other’s Fleming tax returns. Discuss any issues you come across with your “taxpayer” (partner) and ask any relevant questions.

207 Training Outline Basic Level Updates
Social Security and Lump Sum Election Method State Tax Refund Business Income Retirement Income Adjustments to Income Itemized Deductions Intermediate Credits Paper & Amended Returns Additional Topics on 2013 Advanced Test Additional Duties Quality Reviews Campus Fellow Manual Volunteer Paperwork

208 Campus Fellow Manual USE THIS AT THE TAX SITE!!

209 Campus Fellow Manual Tab 1: Site Information
Remember: Each tax site has a unique Client ID! Make sure you use the correct Client ID! Important phone numbers, Local IRS and SSA Offices Always talk to your Site Coordinator if you have questions BEFORE calling one of these numbers with a question or referring your taxpayer to any of these numbers.

210 Campus Fellow Manual Tab 2: Site Organization and Set-Up
Site Coordinator’s Daily Checklist: Ask your site coordinator how you can assist them! Day-Before Call Script, pg. 6 Documents/Forms to be kept on site (just for reference)

211 Campus Fellow Manual Tab 3: Volunteer Information Volunteer FAQ
Volunteer Etiquette Guide What Issues Can I Handle? (Campus Fellows are Intermediate) Scope of Service Chart Form C Intake/Interview Job Aid for Volunteers Read through this before coming to the tax site!

212 Campus Fellow Manual Tab 4: Finishing a Return
Pgs : Process for Conducting a Thorough Quality Review USE THIS EVERY TIME you do a Quality Review!! Consent to Use and Disclose Forms (Read through this before you come to the tax site) Paper Returns Amended Returns

213 Campus Fellow Manual Tab 5: 1040 and Forms Form 1040 Form AL-40
Alabama Tax Laws Various Income Forms Important information re: codes on 1099-Rs, W-2s Itemized Deductions 1098-T Tuition Statement Information Additional forms you may see

214 Campus Fellow Manual Tab 6: Save Your Refund Completing Form 8888
Entering taxpayers into the prize drawing

215 Campus Fellow Manual Tab 7: Alabama Exempt Defined Benefits Plans
Lists defined benefits plans exempt from AL taxes Check this list first when trying to determine if a plan is defined benefits

216 Campus Fellow Manual Tab 8: Campus Fellow Summary Chart
Line by line instructions for entering taxpayer information into TaxWise

217 Training Outline Basic Level Updates
Social Security and Lump Sum Election Method State Tax Refund Business Income Retirement Income Adjustments to Income Itemized Deductions Intermediate Credits Paper & Amended Returns Additional Topics on 2013 Advanced Test Additional Duties Quality Reviews Campus Fellow Manual Volunteer Paperwork

218 Volunteer Etiquette Follow the Quality Site Requirements.
Conduct a thorough interview. Be sensitive to the taxpayer. Keep personal information confidential. Do only what you are trained and certified to do.

219 Ethical Violations An ethical violation is a knowing breach of any of the volunteer standards of conduct All VITA volunteers must undergo training on volunteer standards of conduct to avoid ethical violations The IRS uses reviews called SPEC QSS to determine the accuracy rate and possible violations at tax sites.

220 Ethical Violations Consequences of intentional violations impact both the volunteer and the organization The volunteer may be removed from VITA and face criminal investigation SaveFirst might lose its IRS grants and the EFIN number that allows it to operate tax sites NOTE: If you make an accidental mistake, you are protected as a volunteer by the VITA program. And ultimately, taxpayers are responsible for the information that is entered on their return.

221 Quality Site Requirements
Every return must be prepared by a volunteer with the proper level of certification needed for that return. Returns should be assigned after the level of certification needed and the certification level of the preparer have been determined and match up. Every volunteer has to use the Intake/Interview sheet in preparing a return.

222 Quality Site Requirements
The volunteer must verify the taxpayer has photo ID, social security cards for themselves and any dependents they are claiming, and all income documents as soon as possible. Taxpayers should be informed that they are ultimately responsible for any information they gave us.

223 Other Violations VITA is a volunteer service. We can not accept cash, solicit donations, or have a donation/tip jar in the entry, waiting, tax preparation, or quality review areas of the tax site. Never use or keep a taxpayer's confidential information for personal gain. This includes soliciting a personal business, offering to receive and turn over a refund for a taxpayer without a bank account, or even asking a taxpayer on a date if you notice they are filing single.

224 Other Violations If you feel a taxpayer is providing fraudulent information, you are not required to complete their return. Never knowingly prepare a fraudulent return. Talk to your supervisor (discretely) if you are concerned about a taxpayer’s return or about information they are providing.

225 Standards of Conduct Test
All volunteers must complete and pass the Volunteer Standards of Conduct Test before volunteering at the tax site Take the test (in your training materials), and we’ll grade it now! PUT YOUR NAME ON THE TEST! Open-book, open-note; refer to the training materials as you complete the exam Turn in to your trainer when you finish

226 Schedule and Online Availability Forms
You will be scheduled for regular weekly shifts between January 20 – March 8 based on your Campus Fellow Agreement On Saturdays, you should be prepared to travel (e.g., Decatur, Montgomery, Gadsden, etc.) You will be reimbursed for mileage and meals.  Please complete the appropriate Campus Fellow availability form online (www.impactalabama.org/taxprep). You must complete this form NOW.

227 Volunteer Paperwork If you did not attend the fall training in person, please fill out the following forms and return them to your trainer: Volunteer Agreement Confidentiality and Liability Form Media Release W-9 If we do not have this paperwork, you cannot receive your stipend or reimbursement!

228 Certification Remember to take the IRS Advanced Certification by JANUARY 17. Use Classmarker to submit your answers. The link to Classmarker is at


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