2015 training updates - · pdf fileevery client must show id and s/s card. 1099 ‐ssa ......
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2015 Training Updates
OCTOBER 2015 NJ CONFERENCE 1
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Reminders
● Every Volunteer must review Policies and Procedures Slides. TP4F ‐ Training – All Volunteers
● All sites must use the Intake/Interview and Quality Review Sheets (13614‐C) – Minor changes – more detailed ACA section.
● Every Client must show ID and S/S Card. 1099‐SSA will not have complete SSN. If last 4 digits match, carry forward, SSN and names consistent on all documents. 4012 says at discretion of Site Coordinator.
● Every return must be Quality Reviewed.
2OCTOBER 2015 NJ CONFERENCE
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Morris Counselor Certification
●Proficiency Part 1 – 4 problems based on 2014 tax law no ACA stuff. Detailed instructions emailed to you and on web site
●ACA Training . Online – 12/15, 12/18 New
OCTOBER 2015 NJ CONFERENCE
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Counselor Certification
● Proficiency Part 2 – IRS Test
Standards of Conduct (Ethics) Test for all volunteers including CF’s
IRS Intake/Interview and Quality Review Test New
IRS Advanced Test
You don’t need to take the Basic Test, Military or International
Health Savings Account Test and certification optional
Answer in book – take test online
OCTOBER 2015 NJ CONFERENCE 4
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Counselor Certification
●Proficiency Part 3 – Problems including 2015 changes and ACA
●Advanced training – QR and Special Topics
●Specialized training –CF and ERO
●Counselor Workshop – last week in January
OCTOBER 2015 NJ CONFERENCE 5
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Federal Tax Law Changes
Tax Year 2015
Pub 4012Pub 4491 – Pages iii – vi
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Indexing
●Exemption to $3000
● Std deductions have gone up
●Phase out AGI for deductions and credits have changed
●Mileage rates changed 57.5 cents
●EIC limits and credit have gone up
● IRA contribution limits the sameOCTOBER 2015 NJ CONFERENCE 7
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Extended Provisions
● Discharge of indebtedness on principal residence excluded from gross income of individuals (COD)
No longer separate course – see Pub 4491
●Qualified Charitable Distribution—QCD (Tax‐free distribution from IRAs to public charities for individuals age 70½ or older)
● Adjustment for educator classroom expenses up to $250
● Adjustment for qualified tuition and fees
NTTC Training – TY2015 8
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Extended Provisions
●Deduction for state and local general sales taxes
●Premiums for mortgage insurance deductible as interest for qualified residence
●Nonbusiness energy property credit
NTTC Training – TY2015 9
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New Provisions
● In scope: 1099‐R Code L used for a Loan treated as a deemed distribution
Schedule C expenses now up to $25,000
1099‐QA Distributions from ABLE accounts (Distributions for qualified disability expenses) The State may not have set up yet. Will do special topic if required
1099‐LTC Long Term Care and Accelerated Death Benefits – Special Topic
NTTC Training – TY2015 10
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New Provisions
● IRS is assigning IP PINs to dependents and spouses
Will need to input on Main Info Sheet.
NTTC Training – TY2015 11
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Additional Boxes on 1099 Forms
● 1099‐INTBox 10 Market discount (2014)Box 11 Bond premium (2014)Box 13 bond premium on tax‐exempt bond (2015)
● 1099‐OIDBox 5 Market discount (2014)Box 6 Acquisition premium (2014)
● 1099‐INT, 1099‐DIV, 1099‐OID, and 1099‐MISCFATCA filing requirement check box (2015)
NTTC Webinar – Oct 2015 12
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Additional Boxes on 1099 Forms…
● Forms with entries or checks in these boxes are out of scope
No IRS instructions
Not in TaxWise
FATCA (Foreign Account Tax Compliance Act) relates to Form 8938, which is out of scope
NTTC Webinar – Oct 2015 13
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Still Out of Scope
●Out of scope: ACA – Form 8962 – Part 4 – Shared policy allocation
ACA – Form 8962 – Part 5 – Alternative Calculation for year of marriage
Rest of ACA in Scope
Simplified home office deduction still out of scope
NTTC Training – TY2015 14
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Questionable Scope
● Include $1 on federal return that would otherwise have a $0 AGI so that return can be e‐filed
Flags return if there was an identity theft situation or marks SSN as “used” to prevent any later attempt at identity theft
● Local SPEC or other IRS reviewers may take exception
NTTC Training – TY2015 15
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Due Dates
● 2015 tax returns are due Monday, April 18, 2016*
● 2016 estimated payments due April 18, 2016*
June 15, 2016
September 15, 2016
January 17, 2017
* April 19 for Maine or Massachusetts
NTTC Training – TY2015 16
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Social Security Printouts
● SSA does not provide Social Security printouts
●Taxpayers who do not have their Social Security card can request a replacement Social Security card (estimated to take two weeks)
● SSA‐1099 will contain only last 4 digits of SSN
NTTC Training – TY2015 17
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Social Security Number Printouts
●Alternatively, If taxpayer has picture ID and all income
documents contain same name and number, carry forward data can be used as proof of name and SSN
NTTC Training – TY2015 18
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Cancellation of Debt
●Credit Card Debt Now part of Advanced certification –Special topic available – in 4491 and 4012
● Foreclosure of Primary Home
Out‐of‐scope ? Suggest making it a special topic and having experienced preparers do it.
Information in Pub 4012
19OCTOBER 2015 NJ CONFERENCE
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Long Term Care Benefits
● LTC Insurance Contracts –
Generally reimbursements not taxable
Per diem costs up to an aggregate limit are non‐taxable
● Reported to taxpayer on 1099‐LTC
● If required, complete Form 8853, Section C (Sections A and B remain out‐of‐scope)
● There is a special topic
20OCTOBER 2015 NJ CONFERENCE
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Waiver Request for Failure to Take Required Minimum Distribution (RMD)
●Taxpayer can request waiver of additional tax for failure to take RMD from qualified retirement plan Form 5329 Part VIII
●Add’l Tax = 50% of amount not taken
Counselor NOT expected to review all taxpayer plans and verify that required distributions were taken
21OCTOBER 2015 NJ CONFERENCE
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1099R Codes (Red New in 2015)
● Several clarifications/updates to codes that are in scope – see Pub 4012, pg D‐20. Examples: 6 – tax‐free exchanges (Section 1035) D – Annuity payments from nonqualified annuities
F – Charitable gift annuity J & T– Early distributions from Roth if not taxable L – Loans treated as deemed distributions S – Early distribution from a SIMPLE IRA in the first 2 years no known exception
W – Changes in LTC contract payments
22OCTOBER 2015 NJ CONFERENCE
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In Scope
● State tax refund from any prior year when it is clearly fully taxable or fully nontaxable
● Sale of bonds that mature or are sold with no gain or loss or are reported on a brokerage statement with capital gain or loss only (no ordinary income/loss)
● Schedule C expense for renting equipment, other than a vehicle, for more than 30 days
OCTOBER 2015 NJ CONFERENCE 23
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●Distributions from SIMPLE or SEP IRAs
● Form 1099‐K for self‐employment income from a credit card. Enter on Sch C, E, or line 21(not rental income such as Airbnb)
●Canadian or German social security income that is treated as US social security
OCTOBER 2015 NJ CONFERENCE 24
In Scope (Continued)
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● Form 8283 to report non‐cash donations of more than $500, but less than $5,000
● Form 1099‐LTC and Form 8853 for Long‐Term Care Insurance payments – Special Topic
● Form 8606 Part I only – Special Topic
See TaxAide Scope Manual for full list and explanation; may not be the same as Pub 4012 OCTOBER 2015 NJ CONFERENCE 25
In Scope (Continued)
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26
TaxWise Changes
OCTOBER 2015 NJ CONFERENCE
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TaxWise Changes
●ACA Worksheet has a new look
●Affordability Worksheet and Marketplace Coverage Affordability Worksheet (New)
● Locations for Identity protection pins for spouse and dependents
● Identity verification on Main Infor Sheet
OCTOBER 2015 NJ CONFERENCE 27
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Tax Wise Changes
OCTOBER 2015 NJ CONFERENCE 28
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Tax Wise Changes
OCTOBER 2015 NJ CONFERENCE 29
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Tax Wise Changes
●W‐2 Verification Code
OCTOBER 2015 NJ CONFERENCE 30
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TaxWise Changes
●Veterans question in the Prep use form
Not on intake sheet ‐ ask
OCTOBER 2015 NJ CONFERENCE 31
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NJ Exempt Interest Update
● If bond owned outright – no change Interest from Federal and NJ obligations are exempt from NJ tax
Interest from other state obligations are taxed
OCTOBER 2015 NJ CONFERENCE 32
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NJ Exempt Interest Update
●When obligations held as part of a Mutual Fund, the game changes
●NJ Qualified Investment Fund
VS
●Non qualified Investment Fund
OCTOBER 2015 NJ CONFERENCE 33
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NJ Exempt Interest Update
●Qualified investment fund
At least 80% invested in Fed and NJ
Fund must be approved by NJ
NJ usually in name
Interest and exempt interest dividends in the fund that are NJ tax exemptFederal obligations including possessions
State of NJ and it’s subdivisions obligations
OCTOBER 2015 NJ CONFERENCE 34
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NJ Exempt Interest Update
●Non qualified investment fund
Less than 80% invested in Fed and NJ
NJ usually not in name
Interest and exempt interest dividends in the fund that are NJ tax exemptFederal obligations including possessions
Investments in obligations of the State of NJ and it’s subdivisions are not tax exempt
OCTOBER 2015 NJ CONFERENCE 35
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NTTC Training Materials
Tax Year 2015
36OCTOBER 2015 NJ CONFERENCE
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Available Training & Site Products
● Pub 4480, VITA/TCE Link & Learn Taxes Training Kit
o Pub 4012 (Volunteer Resource Guide)
o Form 6744 (VITA/TCE Volunteer Assistor’s Test/Retest)
Note: Pub. 4480 will be the only training kit mailed.
● Pub 4012, Volunteer Resource Guide (standalone) will have holes for 3 ring binder
37OCTOBER 2015 NJ CONFERENCE
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● Pubs 4491 and 4491‐W, Training Guide & Problems (on website only except for new counselors)
New recruits get 4491 dates 2015
Pub 4491‐W will not be updated
USE NTTC Workbook instead (in Portal and TP4F) No NJ problems use Proficiency in TaxPrep4Free
● Pub 4961, VITA/TCE Volunteer Standards of Conduct ‐Ethics Training.
Available Training & Site Products
38OCTOBER 2015 NJ CONFERENCE