Reporting Income from Sale of Stock Line 13 (if long-term) Sch D Pg 1 8e, 9e or 10e 8949 Pg 1 3a Cap Gn Wkt Sale of Stock Line 13 (if short-term) Sch D Pg 1 1e, 2e or 3e 8949 Pg 1 1a Cap Gn Wkt View screen shots in your Helpful Tips packet
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). Sale of Stock View screen shots in your Helpful Tips packet
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
Sch K-1: Interest and 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 Sch K-1 Schedule K-1
Reporting Income from Sch K-1 Schedule K-1 Type of IncomeWhere to Report Taxable Interest Income1040 Line 8a Sch B Line 1b Interest Stmt (same as interest income from 1099-INT) Royalties1040 Line 17 Sch E Pg 1 1*C K1 P/S Pg 1 Line 7/6 (use code 6 in Part 1) View screen shots in your Helpful Tips packet
Understanding the Intake/Interview Form and Conducting a Thorough Quality Review for Every Taxpayer
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.
The Intake Process: Completing Form 13614-C In most cases, the taxpayer completes pages 1 and 2 of the Intake Interview Form (Form 13614-C) in the waiting room before meeting with a tax preparer. Provide assistance as needed
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
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.
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 16-19 if you have questions Remember: Campus Fellows are Intermediate Level Volunteers
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
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