1. Lesson 14 Finishing the Return

2. Objectives Calculate and report federal income taxes withheld from all sources Calculate and report estimated tax payments Calculate the refund or amount due Determine if estimated taxes should be paid Determine who qualifies for an extension of time to file Determine if changes to the Form W-4 or W-4P should be suggested

3. Checklist For Finishing The Return Withholdings, Payments, and Other Credits Paying Taxes or Adjusting Withholding Advance Earned Income Tax Credit Name, Address, and Taxpayer Identification Section

4. Checklist For Finishing The Return - continued Return Assembly and Copy Site Identification Number On Site Quality Review Signing the Return - Self-Select Personal ID Number Taxpayer Question Where to Mail Paper Returns

5. Federal Tax Withholding Add all federal withheld income tax together Withheld income tax can appear in: –Form W-2, box 2 –Form 1099-R, box 4 –Form 1099-INT, box 4 –Form 1099-DIV, box 4 –Form W-2G, box 2 –Form 1099-G, box 4 –Form 1099-MISC, box 4 –SSA 1099

6. Estimated Tax Payments Verify all federal estimated tax payments together Be sure to include: –An overpayment from the 2005 return that was applied to 2006 tax payments –Payments made using the Form 1040ES, including the one made in January, 2007

7. Refund or Balance Due If the total payments exceed the total tax, this creates an overpayment Overpayments are refunded unless applied to other accounts or tax years If the total tax exceeds the total payments, this creates a balance due to be paid with the return

8. Figuring Estimated Tax for 2007 If it is expected that $1,000 or more will be owed on the 2006 and –Withholding and credits to be less than the smaller of 90% of 2007 tax or 100% of 2006 tax** Use Form 1040ES to calculate estimated tax payments All checks or money orders should be made payable to: “United States Treasury”

9. Form W-4 and W-4P These forms are used to tell payers how many withholding allowances the taxpayer is claiming If there is a balance due on the 2006 return, the withholding may need to be adjusted To change the withholding, a new Form W-4, or Form W-4P, should be completed and presented to the payer

10. Completing and Assembling the Return Confirm SSNs or ITINs on return Paper returns must be assembled by “sequence number” Form W-2 and/or Forms 1099 (federal copy) must be attached to Form 1040 for paper or Form 8453 for e-file Site Identification Number – very important Assigned by Territory Office Proper location is in the paid Preparer Section

11. Decedents “Deceased” on the top of return, name and date of death Married Filing Joint – surviving spouse enters “Filing as surviving spouse” in signature the area on either Form 1040 or Form 8453 Single return – Personal representative signs and submits Form 1310 to claim a refund Power of Attorney – attach to 1040 or 8453

12. Combat Zone Provisions Determine who qualifies for an extension of deadline Identify special tax benefits that are available to persons who die in a combat zone or from a terrorist or military action. Explain how to file claims of forgiveness

13. Extension of Deadline Actions extended Length of extension Requirements for the extension

14. Decedents Filing a return Combat Zone Forgiveness Military or Terrorist Actions

15. Lesson Summary Always try to establish a system of quality review at your site If you are not already electronically filing returns, please consider this option SIDN on all returns

16. Application of Tax Law (Publication 678-W) Basic Course Intermediate Course Advanced Course Military Course International Course Comprehensive Course Problem & Exercises