EKS 2 SCENARIO-BASED TRAINING

IN THIS SCENARIO YOU WILL REVIEW Who must file Filing Status Exemptions: personal exemption Income- taxable v. nontaxable W-2 income Standard deduction ACA- full year coverage

IN THIS SCENARIO YOU WILL LEARN Filing a return as a dependent Exemptions: Dependency exemption Gambling income ACA- full year coverage through parents

LET’S GET STARTED This will be you!

Let’s meet the taxpayer 1. SCENARIO JESSE CASH Let’s meet the taxpayer

Hello! I AM JESSE CASH My parents still take care of me. They pay for my school, and I was home with my them for the summer.

A LITTLE ABOUT ME I work at a bagel shop. I eat bagels for almost every meal. I’m in college. Sic ‘em Bears!

INTERVIEW NOTES Jesse wants to have his refund by check Jesse did not itemize his deductions Jesse loves to play the lottery and had some winnings last year Jesse is on his parent’s health plan Jesse is single

Let’s look at the Intake/Interview Sheet 2. SCENARIO 2 JESSE CASH Let’s look at the Intake/Interview Sheet

What questions should we ask Jesse?

What forms should we look for?

What do we do with grey box?

BEFORE DIVING IN... Does Jesse need to file? Is the return in scope?

Does Jesse need to file? A1

Is Jesse’s return in scope? 9-11

3. SCENARIO 2 JESSE CASH 1040 Step by Step

FILING STATUS Filing status is based on marital status and family situation and determines the rate at which income is taxed. A taxpayer may be eligible for more than one filing status. The taxpayer should choose the filing status that results in the lowest tax. B1

5 FILING STATUSES Married Filing Jointly Married Filing Separately Legally married people file together Married Filing Separately Legally married people file separately Single Not married, never been married, legally divorced Head of Household An unmarried or considered unmarried person with a qualifying dependent Qualifying Widow/Widower A taxpayer whose spouse has died in the prior two tax years AND they have a qualifying dependent.

What is Jesse’s filing status? B1

Exemptions reduce the taxpayer’s taxable income DEPENDENCY EXEMPTION Exemptions reduce the taxpayer’s taxable income

CLAIMING A DEPENDENT You can’t claim any dependents if you, or your spouse if filing jointly, could be claimed as a dependent by another taxpayer. You can’t claim a married person who files a joint return as a dependent unless that joint return is only to claim a refund of income tax withheld or estimated tax paid. You can’t claim a person as a dependent unless that person is a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico. You can’t claim a person as a dependent unless that person is your qualifying child or qualifying relative C3

QUALIFYING CHILD TESTS Under age 19 or under age 24 and a full time student AGE Not filing a joint return unless it is to claim a refund of tax witheld JOINT RETURN Must be son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. RELATIONSHIP Not provided more than half of his her own support during the year SUPPORT Lived with you more than half the year RESIDENCY C3

QUALIFYING RELATIVE TESTS Must be related to you OR live with you all year Can’t be your qualifying child or the qualifying child of anyone else Cannot have more than $4,050 in income More than half of the support of this person must be provided by the taxpayer C3

Can Jesse be claimed as a dependent?

Exemptions reduce the taxpayer’s taxable income PERSONAL EXEMPTION Exemptions reduce the taxpayer’s taxable income

Can Jesse claim a personal exemption?

WATCH instructor Enter Jesse’s Personal Information, Filing Status and Personal Exemption K8

Now you try Enter Jesse’s Personal Information, Filing Status and Personal Exemption K8

INCOME Taxable Wages* Cash Income Lottery winnings* Jury Duty Payments Interest & Dividents D1

Scenario 2 Wages

Scenario 2 Lottery Winnings

Enter Jesse’s W-2 and W2-G WATCH instructor Enter Jesse’s W-2 and W2-G D3&44

Now you try Enter Jesse’s W-2 & W2-G D3&44

DEDUCTIONS Deductions reduce your taxable income. TaxSlayer calculates the Standard Deduction for you.

What is Jesse’s Standard deduction? F1-2

Let’s look at Jesse’s Standard Deduction

AFFORDABLE CARE ACT Every taxpayer is required to have health coverage and report that coverage on their tax return

THREE OPTIONS MEC Exemptions SRP Minimum Essential Coverage Taxpayers will receive 1095-A, 1095-B or 1095-C as proof of coverage. Only A is required if covered through the marketplace. Exemptions Some taxpayers are exempt from having coverage SRP Shared Responsibility Payment ACA

Which one applies to Jesse? ACA4

Enter Jesse’s ACA information WATCH instructor Enter Jesse’s ACA information ACA 1-3

Enter Jesse’s ACA Information Now you try Enter Jesse’s ACA Information ACA 1-3

SAVINGS IS A BIG PART OF TAX TIME Ask every taxpayer if they want to save part of their refund.

Would you like to save part of your refund today? Tax time is the perfect time to save for an emergency, a college savings account or another life dream you have.

SAVE SOME. SPEND SOME. Use Form 8888.

WITH FORM 8888 THERE ARE OPTIONS Checking Account Savings Account Savings Bond

WHAT DOES JESSE WANT TO DO WITH HIS REFUND CHECK Mailed check can take several weeks. DIRECT DEPOSIT Usually deposited in 7-10 days. You need the bank account and routing numbers. . K14-15

Enter Jesse’s check preference in the return WATCH instructor Enter Jesse’s check preference in the return

Enter Jesse’s check preference in the return Now you try Enter Jesse’s check preference in the return

4. SCENARIO 2 JESSE CASH Finishing the return

CHECK YOUR WORK QUALITY REVIEW Review entries: Basic Information - filing status & exemptions Income: W-2 Credits: EIC ACA: MEC Do we have matching AGI & refund?

AGI (2015 calculations) Federal Refund (2015 calculations) $2,023 AGI (2015 calculations) $130 Federal Refund (2015 calculations)

FINISHING THE RETURN Ask the custom questions All returns must be Quality Reviewed Print returns (Federal and State) for Taxpayer Review return with taxpayer Have Taxpayer and Spouse sign 8879s for Federal and State Remind them they are responsible for their return and by signing, they are agreeing it is accurate – 1 for the taxpayer, 1 for the VITA site Not sure if this is really true in taxslayer

YOU DID IT! Any questions?

WORKOUT Dependency Exemptions

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