TAX BASICS YOU MUST KNOW ① FILING STATUS ② DEDUCTIONS ③ CHILD TAX CREDIT (CTC) ④ EARNED INCOME TAX CREDIT (EIC) ⑤ DIFFERENT INCOME TYPES ⑥ OBAMACARE

① FILING STATUS The FIRST step to determine a customers filing status is asking if they are:  The filing status effects the deductions and credits available to them  The customer does not have a choice of what their filing status is MARRIEDNOT MARRIED

MARRIED Married Filing Joint This is the best filing status that will be used Even if the spouse does not work Married Filing Separate a. You will rarely use this filing status. b. It gives the lowest standard deduction. c. The taxpayer does NOT receive EIC using this status

NOT MARRIED Head of Household (HOH) Paid over half the cost of keeping up a home for a QUALIFYING person Single No QUALIFYING dependents and are not legally married

② Standard Deductions and Itemized Deductions  If the taxpayer has more money from itemized deductions than their standard deduction amount, then they’ll qualify to use itemized deductions  If you are unsure which is higher just enter the amounts on the Itemized Deduction form in the program.

STANDARD DEDUCTION If your filing status is: Your deduction is: Married Filing Joint $12,600 Married Filing Separate $6,300 Head of Household $9,250 Single $6,300 Qualifying Widow $12,600  A standard deduction is a dollar amount that reduces the amount of income on which you are taxed

ITEMIZED DEDUCTIONS  Mortgage interest  Real estate taxes  Charitable contributions  Ad valorem taxes (car tags)  A portion of medical expenses  A portion of job expenses  State tax paid from W-2’s  Gambling losses up to gambling winnings

③ CHILD TAX CREDIT  Up to $1000 per child  Child must be 16 or under (1999 or later)  Amount of credit is based on taxable income and other factors  If someone has a taxable income of $0 then they do not receive CTC  Not everyone will receive this credit

④ EARNED INCOME TAX CREDIT  A refundable tax credit for people who work and have earned income under about $53,495  EIC is available to families and individuals that qualify. The credit can be as much as $6,268 with 3 qualifying dependents  To claim it, you must have earned income. You must have been employed some part of the year

QUALIFICIATIONS FOR EIC 1. The taxpayer must have a valid Social Security Number….(NOT start with 9) 2.And ONE of these 3: Dependent must be 18 or under Or 23 or under and a full time student Or Permanently and totally disabled AND The relationship of the qualifying dependent must be…..

QUALIFYING A DEPENDENT  Son, daughter, grandchild, foster child  Brother, sister, niece, nephew, whom the taxpayer cares for as their own child  Dependent must have lived with the taxpayer in the U.S. more than half the year

$6000 $5500 $5000 $4500 $4000 $3500 $3000 $2500 $2000 $1500 $1000 $500 $0 $0 $5000 $10000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 Total Earned Income 3 Children 2 Children 1 Child 0 Children EIC Chart $5500 $4500 $3000

ObamaCare Basics Also called the Affordable Care Act (ACA) Law requires all citizens to have healthcare coverage or be fined a tax penalty There are 20 exemptions that can be used to waive the penalty if you qualify Fee for not having insurance in 2015 is $325 per adult and $ per child or 2% of taxable income, whichever is greater! You can’t be denied health insurance coverage Don’t stress, just use LIVE HELP for more information!

How to Enter ObamaCare This is located on our website under Reference