1. 1 District 5 LC Meeting 2012 What’s New in 2012 Highlights – Dist 5 Bob Eslinger Pacific Region Training Advisor

2. 2 District 5 LC Meeting 2012 WHAT'S NEW IN 2012 Highlights  Training Approach  2012 Potential Changes  TWO Changes  TIGTA/IRS/SPEC Review  Program Scope  ShareNet/AZ Tax  Certification

3. 3 AZ Instructor Workshop 2012 TRAINING APPROACH  Train to 2011 Tax Law using 2011 Tax Software  Transfer to 2012 once tax law is defined and software is available  Certification same as last year

4. 4 AZ Instructor Workshop 2012 TRAINING MATERIAL  Kit 1 - Pub 4480 Kit – Includes 2011 Pub 4491W workbook plus Pub 5051 CD with all 2011 training products; and Form 6744 test.  Form 6744 test is complete and is being shipped with Pub 4480 kit. Can also be ordered separately; Available on L&L  Pub 4491 (2011) available printed or electronically  Pub 3189 (e-file Administrator Guide) and 2012 Pub 17 ordered separately  Orders placed by 11/1/12 shipped around 11/19  Orders placed 11/2 – 11/8 shipped 11/26

5. 5 AZ Instructor Workshop 2012 TRAINING PACKETS, cont’d  Kit 2 - Once 2012 tax forms and tax law updates are determined, Pub 4012 Kit will be released:  Pub 4012, “Volunteer Resource Guide” and Pub 4491-X, VITA/TCE Training Supplement along with CD containing 2012 tax forms and instructions

6. 6 AZ Instructor Workshop 2012 TRAINING PACKETS, cont’d  Link & Learn Training has been redeveloped  More people use online for tax law training and learning TaxWise  IRS - SPEC's ultimate goal is to have all partners transitioned to e-learning products and training by 2014  NTTC has increased use of self-study and on-line learning tools

7. 7 AZ Instructor Workshop 2012 2012 Changes  2012 Standard Deduction:  Single/MFS = $5,950 ($150 increase)  HOH = $8,700 ($200 increase)  MFJ/QW = $11,900 ($300 increase)  Additional standard deduction for people 65/older or blind remains same  $1,150 for married individuals filing jointly or separately and qualifying widow(er)s and $1,450 for singles/HOH  Personal exemption increase of $100 to $3,800.

8. 8 AZ Instructor Workshop 2012 2012 Changes (cont’d)  FICA Tax - Extension of temporary decrease in employee’s share of payroll tax  4.2% social security tax on first $110,100 wages  Self-employed tax rate of 10.4% up to the social security wage limit of $110,100 wages  Social Security & Medicare wage threshold for household employees = $1,800 ($100 increase)

9. 9 AZ Instructor Workshop 2012 Expired Provisions (beginning after December 31, 2011)  IRA Distributions for Charitable Purposes  Educator Expense Adjustment - not in excess of $250  Tuition/Related Expenses - for qualified tuition and related expenses, ranging from $2,000 to $4,000  Mortgage Insur Premium Deduction  State/local general sales taxes Deduction

10. 10 AZ Instructor Workshop 2012 Expired Provisions (beginning after December 31, 2011)  AMT Exemption Amount - alternative minimum tax (AMT) exemption amount for individuals is scheduled to drop significantly  It will decrease from 2011 levels of $74,450 for joint filers and surviving spouses and $48,450 for single individuals other than surviving spouses  To $45,000 and $33,750, respectively, in 2012  Nonbusiness Energy Credit

11. 11 AZ Instructor Workshop 2012 Standard Mileage Rate  55.5 cents per mile for business  23 cents per mile for medical or move- related mileage  14 cents per mile for charitable purpose

12. 12 AZ Instructor Workshop 2012 Earned Income Tax Qual Child Income(Single) Income (MFJ) Max 3 45K 50K $5891 2 41K 47K $5231 1 37K 42K $3169 0 14K 19K $475 Must have <$3200 investment income

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14. 14 AZ Instructor Workshop 2012 Tax Form Changes  Schedule C-EZ exists for one more year, but not recommended  Use Sch C but must not exceed Sch C-EZ limitations, including business expense up to $5,000  Form W-2 – Cost of employer-sponsored health coverage reported in box 12 using code DD. NOT TAXABLE

15. 15 AZ Instructor Workshop 2012 Sch C Limitations

16. 16 AZ Instructor Workshop 2012 Tax Forms Form 8863- Education Credits  Parts II and IV are moved to page 1 and renumbered as Parts I and II  Old Part I became Part III on page 2  Part III is for information regarding the student, the student’s eligibility for a credit and the educational institution(s) information  Additional page 2 information required for each student

17. 17 AZ Instructor Workshop 2012 Form 8863 – Page 2

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19. 19 AZ Instructor Workshop 2012 Form 8863 – Page 1

20. 20 AZ Instructor Workshop 2012 New TWO Form (Wkt7)  1040 Line 21 Other Income  New Worksheet for reporting Miscellaneous Income  Includes 16 additional income lines  New diagnostics will be added  Income from another form auto-populates the worksheet with amount and type  1099-Misc income  link to worksheet then to 1099M. September 3, 2015 - USA 20

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22. 22 AZ Instructor Workshop 2012 SCH D & FORMS 8949  New 2012 - Form 8949 has been changed – which requires separate columns along with description of the sale  Stock Symbol  Number of Shares  Code for adjustment is next to amount  TaxWise will create appropriate 8949s based on entry in the Capital Gain or Loss Transactions Worksheet (Cap Gain Wkt)  Schedule D has new reporting lines for use in Forms 8949

23. 23 AZ Instructor Workshop 2012  Beginning in 2011, brokers must report cost or other basis on Form 1099-B, unless securities sold were noncovered* securities  Beginning in 2011, brokers must report whether a gain or loss is short-term or long-term on Form 1099-B, unless the securities sold were noncovered* securities NEW BROKER REQUIREMENTS

24. 24 AZ Instructor Workshop 2012 NONCOVERED SECURITIES  A security other than stock  Stock purchased before 2011  Stock acquired before 2012 in a regulated investment company for which the average basis method is available  Stock acquired before 2012 in connection with a dividend reinvestment plan

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26. 26 AZ Instructor Workshop 2012 2012 Capital Gains Worksheet

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29. 29 AZ Instructor Workshop 2012 What’s New for 2012-13 TWO  No More Legacy processing all Modernized eFile (MeF)  “Linked” State Returns will be held until Federal Return is accepted.  No more State Reject 901 and 902

30. 30 AZ Instructor Workshop 2012 What’s New for 2012-13 TWO TaxWise 2012 - TWO  TWO Training Templates can be “Published” to Production version  Create Template from Master Template in Training, then “Publish” to Production  TaxWise Online Training and Practice Lab  Time out increased to 60 minutes

31. 31 AZ Instructor Workshop 2012 What’s New for 2012-13 TWO  Preparer Use Form  Option to carry forward  Carries forward both questions and answers  Taxpayer Reminders  Enter information they want to see the following year  New option in Carryforward >Prior Year Data to import from 2011 to 2012  Preparer has option to show each time return is opened  Setup Options>General Tab September 3, 2015 - USA 31

32. 32 AZ Instructor Workshop 2012 What’s New for 2012-13 TWO  Print Reject Details  View and print from inside TaxWise Online  Allows easier access to see and resolve rejects  Add Client telephone number in Client letters

33. 33 AZ Instructor Workshop 2012 The diary will automatically record the user you are logged in as, the day, date and time. TaxWise 2012 - TWO September 3, 2015 - USA 33 A new button on the toolbar to create Taxpayer Diary A new icon will appear in the Existing return list to the left of the TIN

34. 34 AZ Instructor Workshop 2012 What’s New for 2012-13 TWO TaxWise 2012 - TWO  TWO Contingency (Off-line) Option  Uses Desktop that updates to TWO when back on-line  TWO system outages  Internet outages at site  Provides roving capability at temporary locations with no internet capability.

35. 35 AZ Instructor Workshop 2012 TIGTA/IRS/Spec Review  TIGTA: 39 sites reviewed  49% were accurate  IRS/Spec: 92% accuracy rate (87% last year)  Keys: QR by second person Tax preparers certified annually to Advanced  Continued Emphasis:  Mandatory use of Intake/Interview and Quality Review Sheet during all taxpayer interviews  Due Diligence

36. 36 AZ Instructor Workshop 2012 DUE DILIGENCE WHAT IS DUE DILIGENCE?  Asking sufficient and thorough questions to ensure the accuracy and completeness of the tax return AND  Verifying the accuracy of documents/receipts presented OR determining when to rely in good faith and without verification on the customer’s oral testimony AND  Ensuring a second person quality review.

37. 37 AZ Instructor Workshop 2012 DUE DILIGENCE (continued)  Counselor must ask questions if the information furnished appears to be incorrect, inconsistent, or incomplete  Volunteer may not ignore information furnished to, or actually known by, the preparer  Counselors must not KNOWINGLY prepare false returns!  Remind taxpayers that when they sign their return, they are stating that the return is accurate to the best of their knowledge and they are responsible for the return

38. 38 AZ Instructor Workshop 2012 Intake Sheet Changes  Section A  Picture ID (such as valid drivers license or other government issued ID)  Part III Income questions added  7. Self Employment Income  8. Cash/check payments for any work performed not reported on Form W-2  Section C Certified Volunteer QR Section  No boxes, emphasis placed on reviewing information on pages 1 & 2

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41. 41 AZ Instructor Workshop 2012 Taxpayer Data and Privacy Policy  The Site or ERO will not keep any forms or documents with a taxpayer identity and/or SSN that is not mandated by the IRS or a State. ie. Form 8453 if used for mailing

42. 42 AZ Instructor Workshop 2012 QSR#10: Security Privacy and Confidentiality  More critical than ever to ask taxpayers for proof of identity and social security numbers  Individuals who are victims can report the incident to the Identity Protection Specialized Unit (IPSU) at 1-800-908-4490.  If it is determined the taxpayer is a victim of identity theft, the unit will place an Identity Theft indicator on the taxpayer’s account.

43. 43 AZ Instructor Workshop 2012 Enter Pin In TW

44. 44 AZ Instructor Workshop 2012 SCOPE  Poster C2467 – What AARP Foundation Tax-Aide can and can’t do for you today (Next 4 slides)  Training Guide Appendix H – Scope Topics  Seven pages of In Scope/Out of Scope discussion by Form/Schedule

45. 45 AZ Instructor Workshop 2012 $5,000

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47. 47 AZ Instructor Workshop 2012 NOTE: COD IS OUT OF SCOPE FOR ARIZONA

48. 48 AZ Instructor Workshop 2012 $ 5,000

49. 49 AZ Instructor Workshop 2012 Training Guide – Appendix H  Appendix H can be found on the ShareNet [Training][Site and Volunteers][Appendix H Scope Topics] or [AZ Tax] [Training]  Provides detailed scope by form/schedule, by line number  Includes any limitations for that particular form or schedule line number

50. 50 AZ Instructor Workshop 2012 Training Guide Appendix H

51. 51 AZ Instructor Workshop 2012 Other Training  District must decide approach to train ERO’s.  Reference ERO Presentation on ShareNet or AZ Tax  As a minimum, a mentor (experience ERO) should be assigned to any new ERO  Client Facilitator and any other volunteer must pass Standards of Conduct test  Reference Client Facilitator training on the ShareNet or AZ Tax

52. 52 AZ Instructor Workshop 2012 https://volunteers.aarp.org

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54. 54 AZ Instructor Workshop 2012 http://www.aztax-aide.org/

55. 55 AZ Instructor Workshop 2012 AZ Tax Site  http://www.aztax-aide.org/ http://www.aztax-aide.org/  Should be the first place to look for information  http://www.aztax- aide.org/Pages/NewMemLinks.html http://www.aztax- aide.org/Pages/NewMemLinks.html  Bypasses entry page and goes directly to counselor information page or  Click on cactus

56. 56 AZ Instructor Workshop 2012 http://www.aztax- aide.org/Pages/NewMemLinks.html

57. 57 AZ Instructor Workshop 2012 Certification Requirements  All volunteers must attend presentation on Standards of Conduct, pass the standard of conduct test (80%) and sign Form 13615 Standards of Conduct Agreement  All counselors must attend training & pass basic, intermediate and advanced test (80%) and prepare 4 exercises assigned by instructor

58. 58 AZ Instructor Workshop 2012 Recommended Exercises  Baylor – Military retiree, wife has died, caring for grandchild, div, pension, SS, and itemized deductions  Fleming – Divorced woman, 2 kids, INT, IRA, pension, self employment, W-2, EITC  Sterling – Retired couple, INT, DIV, stock sale, pension and SS  Kent Comprehensive – Most everything except EITC. Line by Line answers

59. 59 AZ Instructor Workshop 2012 Take the Test On L&L  All counselor can certify on L&L  Problems can be prepared on Practice Lab, TWO or desktop  Form 13615 Volunteer Agreement can be printed when test completed  Biggest Advantage – Instructor doesn’t have to grade test  See document [Take the Test Using Link & Learn (11/14)

60. 60 AZ Instructor Workshop 2012 Counselor Certification Continued  Lead instructor should collect Form 13615 and inform LC of certified counselors and other counselors who have passed the Standards of Conduct (CF/TC).  All Form 13615s must be signed by instructor & a copy submitted to Sandy Liska either by mail, fax or email. For new counselor she will also need the supervisor name.  8103 E Southern Ave Lot 73  Mesa AZ 85029-3508  480-380-1505  aarpsdliska@gmail.com

61. 61 AZ Instructor Workshop 2012 Counselor Certification Continued  If LC grades the test and has the counselor sign Form 13615, the form should be signed by the LC, a copy sent to Sandy and the instructor should be informed.  The Form 13615s should be retained at the local level until the end of the season  Sandy will provide the list of certified counselors to the IRS  The list of AZ certified counselors will be available online.

62. 62 AZ Instructor Workshop 2012 Summary  Starting off to be a crazy year  Potential Congressional changes impacting program  Initial training and testing to 2011 training material  2 basic changes, Capital Gain Worksheet and Form 8863 Education Credits  Emphasis on staying in scope, and Due Diligence  Schedule C limited to $5,000 expenses

63. 63 AZ Instructor Workshop 2012 QUESTIONS???