savefirst campus fellow intermediate tax training: january refresher 2013-14

SaveFirst Campus FellowIntermediate Tax Training:

January Refresher

2013-14

Training Outline1.1. Basic Level UpdatesBasic Level Updates2.2. Social Security Lump Sum Election MethodSocial Security Lump Sum Election Method3.3. State Tax RefundState Tax Refund4.4. Self-Employment IncomeSelf-Employment Income5.5. Retirement PlansRetirement Plans6.6. Adjustments to IncomeAdjustments to Income7.7. Itemized DeductionsItemized Deductions8.8. Intermediate CreditsIntermediate Credits9.9. Paper and Amended ReturnsPaper and Amended Returns10.10. Additional Topics on 2013 Advanced TestAdditional Topics on 2013 Advanced Test11.11. Additional DutiesAdditional Duties12.12. Quality ReviewsQuality Reviews13.13. Campus Fellow ManualCampus Fellow Manual14.14. Volunteer PaperworkVolunteer Paperwork

SaveFirst Training ● 2013-14 ©

Due Date of Return

Due date: Due date:

April 15, 2014April 15, 2014

SaveFirst Basic Training ● 2012 ©

Exemptions• The amount a taxpayer can deduct for

each exemption increased to $3,900 for 2013.


Standard Deductions: 2013

MFJ or QWMFJ or QW $12,200$12,200

HoHHoH $8,950$8,950

Single or MFSSingle or MFS $6,100$6,100


Social Security Benefits• Sometimes a taxpayer may receive Social

Security payments for previous years.• Taxpayers can either

Report the amount for the previous years as income for the current tax year (2013),

Use the Lump Sum Election Method, and report the amount for the previous years as income for the previous years (and thus pay any taxes on it based on previous years’ income).


Lump Sum Election Method• Lump Sum Election Method is out of

scope for basic volunteers.

• In order to compute the taxable benefits, you will need copies of the taxpayer’s prior year returns (to get their AGI).



Social Security Benefits: SSA-1099


Income

Medicare premiums

Don’t miss withholding!

Total benefits

Lump-Sum Benefit

Payments

Reporting Lump-Sum Benefits• Option 1: Report the whole payment as it was

received Enter the whole payment on the first line (SS

received this year) Same step as in Basic Training!


Income

OPTION 1:Link: Line 20a 1040 Wkt1


Income

- Social security

received this year

- Medicare

- Federal tax withheld


Reporting Lump-Sum Benefits• Option 2: Separate payments based on year

received and record taxable benefits appropriately Only the current year income will be adjusted Do NOT file an amended return Taxpayer can choose 2nd option if it lowers the

taxable benefits (TaxWise will automatically determine which is more beneficial)


Income

Option 2 – Lump Sum Election Method:Link: Line 20a 1040 Wkt1

- Social security

received this year

- Medicare

- Federal tax withheld

- Then scroll to the

bottom of the sheet


Income

Lump-Sum Benefits in TaxWise(Option 2)

• Enter the benefits for 2013 on the gross amount received line.

• Click on the amounts taxable from previous years line and type F9 to pull up a Lump Sum Wkt


Income


• Enter the earlier year for which the benefits were received and the filing status.


Income


• Line 1: Enter amount of benefits received in prior year and amount for prior year received in current year.

• Line 3: Enter the AGI for prior year.


Income

Lump-Sum Election Method• Step 1-Enter Box 5 total in the Social Security received this

year line on 1040 Wkt 1• Step 2-Calculate amount paid for current tax year by

subtracting prior years from box 5 benefits• Step 3-Enter in appropriate box at bottom of worksheet• Step 4-Link to Lump Sum Wkt from line, “amounts taxable

from previous years”• Step 5-Enter pertinent prior year at top of Lump Sum Wkt (eg,

2010) and check appropriate marital status for that year• Step 6-On line 1, enter amount of benefits received in prior

year and amount for prior year received in current year• Step 7-On line 3, enter AGI for prior year• Step 8-On lines 4 and 5, enter adjustments/exclusions and

tax exempt interest amounts for prior year• Step 9-Close worksheet; repeat steps 4-8 for additional prior

years



2012 State Tax Refund

• The 2012 State Tax Refund may be taxable The 2012 State Tax Refund may be taxable and need to be reported.and need to be reported.

• Answer question in Box under line 9.

• If If YES, link: Line 10 , link: Line 10 St Tax Refund. St Tax Refund.• Complete the State Tax Refund Worksheet Complete the State Tax Refund Worksheet

with information from 2012 return.with information from 2012 return.

Income

Info Needed from 2012 Return• State refund amount

• Sch A, line 5a, income taxes

• Sch A, line 5b, general sales tax

• Total itemized deductions amount

• Filing status

• Taxable income amount


Income

St Tax Refund in TaxWise


Enter in the amounts for:

-State refund amount (line 1)-Sch A, line 5a, income taxes (line 2)-Sch A, line 5b, general sales tax (line 2)

Income

St Tax Refund in TaxWise



-Total itemized deductions (line 6)-Filing status (line 7)-Taxable income amount (line 12)

Income

Sch C: Self-Employment Income

• From 1099-MISC, Line 7 Nonemployee Compensation

• Can only report expenses up to $10,000

• Cannot report a loss

Business Income• Income from personal business or

independent contractor

• Income can reported on: 1099-MISC W-2 (Statutory Employee) Personal records 1099-K

• Link: Line 12 Sch C-EZ or C


Self-Employment Income

Business Income• We can file a Schedule C or C-EZ if the We can file a Schedule C or C-EZ if the

taxpayer meets the following:taxpayer meets the following: Cash method of accountingCash method of accounting No inventoryNo inventory Does not want to depreciateDoes not want to depreciate No net lossNo net loss Only one business (if taxpayer owns a Only one business (if taxpayer owns a

business)business) No employees during the yearNo employees during the year Had business expenses of Had business expenses of less thanless than $10,000 $10,000

• Sch C-EZ less than $5,000Sch C-EZ less than $5,000• Sch C up to $10,000Sch C up to $10,000



1099-Misc.



Box 7

“Nonemployee Compensation”




1099-Misc.• Income reported in Box 7 on a 1099-MISC Income reported in Box 7 on a 1099-MISC

is considered self-employment income and is considered self-employment income and should be reported on a Schedule C-EZ or should be reported on a Schedule C-EZ or a Schedule C.a Schedule C.

Link: Link: Line 12Line 12 Sch C-EZ or Sch CSch C-EZ or Sch C Then, Link: Then, Link: Gross ReceiptsGross Receipts Line Line 1099-MISC1099-MISC


1099-Misc

ONE MORE TIME:ONE MORE TIME:

Income reported in Box 7 on a 1099-MISC Income reported in Box 7 on a 1099-MISC is considered self-employment income is considered self-employment income and should be reported on a Schedule and should be reported on a Schedule

C-EZ or a Schedule C.C-EZ or a Schedule C.



Schedule C-EZ and Schedule C• Net profit = Gross receipts – ExpensesNet profit = Gross receipts – Expenses• Deductible expensesDeductible expenses

Advertising Advertising InsuranceInsurance InterestInterest Legal and professional servicesLegal and professional services RepairsRepairs 50% of business entertainment50% of business entertainment UtilitiesUtilities Vehicle expenses (additional information needed for Part Vehicle expenses (additional information needed for Part

III of the C-EZ or Part IV of the Sch C, pg 2))III of the C-EZ or Part IV of the Sch C, pg 2)) See your Campus Fellow Manual Tab 5 for more See your Campus Fellow Manual Tab 5 for more

detailsdetails




Business Mileage Rates• If used for business purposes, taxpayer can receive

a mileage deduction at the federal rate. • Cannot deduct commuting miles.

• Cannot calculate depreciation (out of scope).• For 2013, the folllow rate is in effect:

• 56.5 cents per mile

• On Sch C-EZ and Sch C, enter total miles.


Self-Employment Income• Line F (Sch C-EZ) or Line I (Sch C)

Did the business make any payments in 2011 that would require filing of Form(s) 1099?

• Line 1 (Income) structured differently 1a: Merchant card and third party payments (for

2011, enter -0-) 1b: Gross receipts or sales not entered on line 1a 1c: Income reported to you on Form W-2 (f the

“Statutory Employee” box on that form was checked) 1d: Total gross receipts


Sch C in TaxWise


Enter in the business information

Sch C in TaxWise: Income


1a: Merchant card & third party sales

1b: Gross receipts not on 1a

1c: Income reported on W2 if the “Statutory Employee” box is checked

1d: TaxWise calculates total gross receipts

Sch C in TaxWise: Expenses


Enter in the amounts for the qualified business expenses

Sch C in TaxWise: Vehicle


Enter in the amounts and answer the questions

TaxWise carries over the mileage expense for you

Sch C-EZ in TaxWise


Enter in the business information

Sch C-EZ in TaxWise: Income & Expenses


1a: Merchant card & third party sales

1b: Gross receipts not on 1a

1c: Income reported on W2 if the “Statutory Employee” box is checked

1d: TaxWise calculates total gross receipts

2: Total expenses (Link to a Scratch Pad)

Self Employment Tax• Must file Sch SE if self-employment

earnings are over $400

• Covers Social Security and Medicare taxes

• Complete Sch C or C-EZ first

• TaxWise automatically calculates the tax onto Line 56



Types of Retirement Plans• Pension: A series of payments for past series of payments for past

workwork• AnnuityAnnuity: A series of payments from a : A series of payments from a

contract with a company, trust, or contract with a company, trust, or individualindividual

• 401(k) Plan401(k) Plan: The employer contributes : The employer contributes part of the employeepart of the employee’’s cash wages to a s cash wages to a retirement plan on a pre-tax basis (not retirement plan on a pre-tax basis (not subject to income tax when deferred)subject to income tax when deferred)


Retirement Income

Form 1099-R


Retirement Income

Taxable Portion of Distributions• Depending on employee contributions, income

from retirement plans can be: FullyFully Taxable Taxable if if

• Employee did NOT contribute (all $ came from employer)Employee did NOT contribute (all $ came from employer)• Employee contributed with before-tax moneyEmployee contributed with before-tax money

PartiallyPartially Taxable Taxable ifif• Employee contributed part of funds with after-tax moneyEmployee contributed part of funds with after-tax money

NotNot Taxable Taxable ifif• Employee madeEmployee made ALL contributions with after-tax dollars (i.e. ALL contributions with after-tax dollars (i.e.

Roth IRAs)Roth IRAs)


Retirement Income

Important NoteYou can prepare returns for retired You can prepare returns for retired

individuals ONLY if the taxable amount of individuals ONLY if the taxable amount of the retirement distribution the retirement distribution has already has already

been determinedbeen determined

IF BOX 2A IS EMPTY, IF BOX 2A IS EMPTY,

FIND YOUR SUPERVISORFIND YOUR SUPERVISOR


Retirement Income


Lines 15/16: Retirement

(Form 1099-R)

Retirement Income

Railroad Retirement Plans• RRB-1099RRB-1099

Treated like SSA-1099 (social security Treated like SSA-1099 (social security benefits)benefits)

• RRB-1099-RRRB-1099-R Treated like 1099-R (pension)Treated like 1099-R (pension)


Retirement Income

Rollover (Tax-Free Distribution)(Code G will be in Box 7 of the 1099-R)


Enter the amount the taxpayer rolled over

Check the Box and type F9

Provide an explanation

Retirement Income


Defined Benefits Retirement PlansIF IT IS A DEFINED BENEFITS PLAN, CLICK BOX 1 IF IT IS A DEFINED BENEFITS PLAN, CLICK BOX 1

ON THE BOTTOM OF THE 1099-R IN TAXWISE.ON THE BOTTOM OF THE 1099-R IN TAXWISE.

Retirement Income

Defined Benefits & Defined Contributions• Defined Benefits:

Taxpayer receives a set amount each month for retirement and is based on salary history and years which they worked at a company.

• Defined Contributions: Taxpayer's retirement depends on the amount of

contributions made into an investment account and the performance of those investments contributed.

• Examples: 401(k), 403(b), employee stock ownership plan, profit-sharing plan.


Retirement Income

Alabama Tax Rules• Defined Benefits PlanDefined Benefits Plan: : A promised benefit is based on A promised benefit is based on

a formula in the plan, often using a combination of the a formula in the plan, often using a combination of the employeeemployee’’s age, years worked for the employer, and/or s age, years worked for the employer, and/or salary.salary. Contributions from employee, employer, or both. Contributions from employee, employer, or both. Employer bears investment riskEmployer bears investment risk..

• Defined Contributions PlanDefined Contributions Plan:: The benefit depends on The benefit depends on contributions made by the employee and/or the contributions made by the employee and/or the employer, performance of the accountemployer, performance of the account’’s investments, s investments, and fees charged to the account.and fees charged to the account. Employee bears investment risk.Employee bears investment risk.


Retirement Income

Alabama Tax Rules• Defined Benefits Plans are Defined Benefits Plans are NOTNOT taxable at taxable at

the Alabama level.the Alabama level.

• To find out if a plan isTo find out if a plan is Defined Benefits Defined Benefits or or Defined ContributionsDefined Contributions Consult online list (Consult online list (www.impactalabama.org)

or your Campus Fellow Manual Call the company that administers the planCall the company that administers the plan Call the IRSCall the IRS


Retirement Income

Hint: All retired civil servants Hint: All retired civil servants (i.e. teachers, city employees, soldiers, etc) (i.e. teachers, city employees, soldiers, etc)

have have Defined BenefitsDefined Benefits plans plans

See Tab 5 in your Campus Fellow Manual for more info at the site

Alabama Tax RulesIF IT IS A DEFINED BENEFITS PLAN, CLICK IF IT IS A DEFINED BENEFITS PLAN, CLICK

BOX 1 IN TAXWISE.BOX 1 IN TAXWISE.


Retirement Income

PracticeJoe has been receiving his retirement payments for several years and has

received a 1099-R. When you ask him if he knows what kind of plan it is, he says he has

no idea but he knows it is from his employment as a teacher. Is this a defined

benefits or defined contributions plan?


Retirement Income

PracticeJoe has been receiving his retirement payments for several years and has

received a 1099-R. When you ask him if he knows what kind of plan it is, he says he has

no idea but he knows it is from his employment as a teacher. Is this a defined

benefits or defined contributions plan?Defined benefits plan

All civil servants will have a defined benefits plan.


Retirement Income

PracticeMaria began receiving her retirement payments this year and was issued a

1099-R. She tells you that this is being drawn from an investment account that she would contribute to and her former employer

would match that contribution. Is this a defined benefits plan or defined

contributions plan?


Retirement Income

PracticeMaria began receiving her retirement payments this year and was issued a

1099-R. She tells you that this is being drawn from an investment account that she would contribute to and her former employer

would match that contribution. Is this a defined benefits plan or defined

contributions plan?

Defined contributions plan SaveFirst Basic Training ● 2012 ©

Retirement Income

PracticeCharles has been receiving his retirement for seven years. Every month, he receives

$100. Is this a defined benefits plan or defined contributions plan?


Retirement Income


PracticeCharles has been receiving his retirement for seven years. Every month, he receives

$100. Is this a defined benefits plan or defined contributions plan?

Defined benefits plan


Adjustments to Income• Decrease taxable incomeDecrease taxable income• Found on lines 23-35 of Form 1040Found on lines 23-35 of Form 1040

Educator ExpensesEducator Expenses Half of Self-Employment TaxHalf of Self-Employment Tax Early Withdrawal PenaltyEarly Withdrawal Penalty AlimonyAlimony IRA (traditional) ContributionsIRA (traditional) Contributions Student Loan InterestStudent Loan Interest College Tuition PaymentsCollege Tuition Payments Jury DutyJury Duty


Adjustments

Educator Expenses• Eligible Educators:

K-12 teacher, instructor, counselor, principal, or aide

Worked at least 900 hours

• Qualified Expenses (up to $250): Ordinary and necessary amounts

• Books• Supplies• Equipment


Adjustments

Link: Line 23 1040 Wkt2• Enter qualified expenses up to $250 for

each person.

• If taxpayer and spouse are both eligible educators, can deduct up to $500.


Adjustments

Half of Self-Employment Tax• Offsets the tax burden placed on Offsets the tax burden placed on

individuals who do not have employers to individuals who do not have employers to pay half of their taxes.pay half of their taxes.

• TaxWise will automatically calculate this TaxWise will automatically calculate this adjustment if you have completed a adjustment if you have completed a Schedule C-EZ or a Schedule C.Schedule C-EZ or a Schedule C.


Adjustments

Penalty on Early Withdrawal of Savings• TaxWise will automatically calculate from TaxWise will automatically calculate from

information on the Interest Statement.information on the Interest Statement.• TaxWise automatically calculates the adjustment TaxWise automatically calculates the adjustment

on on Line 30Line 30..• Make sure you entered in ALL interest and Make sure you entered in ALL interest and

penalties imposed correctly on the Sch B.penalties imposed correctly on the Sch B.

Important: Make sure you have Important: Make sure you have entered in entered in ALLALL interest received interest received ANDAND penalties imposed penalties imposed

for early withdrawals on for early withdrawals on the the Interest StatementInterest Statement of Schedule B of Schedule B


Adjustments

Alimony Paid• Payment to a spouse or former spouse under a Payment to a spouse or former spouse under a

divorce/separation agreement.divorce/separation agreement. Child support and voluntary payments are NOT Child support and voluntary payments are NOT

considered alimony.considered alimony. Alimony received is considered income.Alimony received is considered income.

• Deduct total alimony paid for the whole year, not Deduct total alimony paid for the whole year, not just one month.just one month.

• Enter in amount and recipientEnter in amount and recipient’’s SSN on s SSN on Line 31Line 31..


Adjustments

IRA Contributions Deduction• IRA: Individual Retirement Arrangements

Personal savings plan that offers tax Personal savings plan that offers tax advantages to set aside money for retirementadvantages to set aside money for retirement

Earnings and gains on contributions are not Earnings and gains on contributions are not taxable until withdrawaltaxable until withdrawal

Contributions to a traditional IRA can be either Contributions to a traditional IRA can be either deductible or nondeductibledeductible or nondeductible


Adjustments

IRA Deduction: Deductible Contributions

Eligibility Requirements:Eligibility Requirements:• Only contributions to a traditional IRA are Only contributions to a traditional IRA are

deductibledeductible• Age Limit: must be under the age of 70 ½ Age Limit: must be under the age of 70 ½

at the end of the tax yearat the end of the tax year• Compensation: must have taxable Compensation: must have taxable

compensationcompensation• Time Limit: Contributions must be made by Time Limit: Contributions must be made by

due date of filing the returndue date of filing the return


Adjustments

IRA Deduction: Joint Returns• If the taxpayers file a joint return and one If the taxpayers file a joint return and one

spousespouse’’s compensation is greater than the s compensation is greater than the otherother’’s:s: Married taxpayersMarried taxpayers’’ combined contributions combined contributions

cannot exceed combined compensationcannot exceed combined compensation Neither spouse can contribute more than Neither spouse can contribute more than

$5,000 ($6,000 if > age 50)$5,000 ($6,000 if > age 50)


Adjustments

IRA Deduction: Allowable Deduction

• The allowable deduction may be adjusted The allowable deduction may be adjusted based on based on Filing statusFiling status IncomeIncome Whether or not the taxpayer/spouse is Whether or not the taxpayer/spouse is

covered by an employer retirement plancovered by an employer retirement plan


Adjustments

IRA Deduction: Penalties• Taxpayers may incur penalties forTaxpayers may incur penalties for

Excess contributionsExcess contributions Early withdrawalsEarly withdrawals Too little withdrawalsToo little withdrawals


Adjustments

IRA Deduction: Excess Contribution

• Contributions for 2013 can be made up Contributions for 2013 can be made up until the due date of the return (i.e. April until the due date of the return (i.e. April 15, 2014).15, 2014).

• An excess contribution above these limits An excess contribution above these limits and any earnings on it will be taxed.and any earnings on it will be taxed. They should still be reported on Form 8606They should still be reported on Form 8606 If the taxpayer has made excess If the taxpayer has made excess

contributions, contributions, refer them to a professional refer them to a professional preparer!preparer!


Adjustments

Link: Line 32 IRA Wkt


Adjustments

Student Loan Interest• Up to $2,500 of interest paid on loan in the Up to $2,500 of interest paid on loan in the

name of aname of a TaxpayerTaxpayer SpouseSpouse Dependent (when the loan was obtained)Dependent (when the loan was obtained)

Note: Student must have been enrolled at least half-time in Note: Student must have been enrolled at least half-time in a program leading to a degree, certificate, a program leading to a degree, certificate,

or other credentialor other credential


Adjustments

Student Loan Interest: Eligibility

• School IS:School IS: AccreditedAccredited Qualified to participate in a student aid program or Qualified to participate in a student aid program or

conduct internship/residency programs leading to a conduct internship/residency programs leading to a degree or certificatedegree or certificate

• Taxpayer IS NOT:Taxpayer IS NOT: Filing MFSFiling MFS Able to be claimed as a dependentAble to be claimed as a dependent If the taxpayer cannot be claimed as a dependent If the taxpayer cannot be claimed as a dependent

but her parents paid the student loan interest, the but her parents paid the student loan interest, the student can claim the deduction.student can claim the deduction.


Adjustments

Tuition and Fees Deduction• Tuition amounts paid by the taxpayer are

reported on a 1098-T and can be entered as an adjustment or a credit.

• The deduction can be claimed for the taxpayer, spouse or any qualified dependent.

• Only out-of-pocket expenses can be claimed; you must subtract amounts paid with scholarships and grants.


Adjustments

Tuition and Fees Deduction• Taxpayers can deduct up to $4,000 in

qualified tuition and related expenses; NOT BOOKS.

• Link: Line 34 1040 Wkt2


Adjustments

Student Loan Interest: Qualified Expenses

• Qualified expenses include tuition and Qualified expenses include tuition and fees required for enrollment, usually fees required for enrollment, usually reported on a 1098-Ereported on a 1098-E

• Expenses that do not qualify: room and Expenses that do not qualify: room and board, transportation, books, and suppliesboard, transportation, books, and supplies

• Must be reduced by scholarships, Must be reduced by scholarships, employer-provided benefits, or tax-free employer-provided benefits, or tax-free education expenseseducation expenses


Adjustments

Jury Duty Pay Given to Employer

• Jury duty pay is taxable income.Jury duty pay is taxable income.

• BUTBUT if that pay is given to the employer, it if that pay is given to the employer, it can be deducted as an adjustment.can be deducted as an adjustment.

• Enter the amount on Enter the amount on Line 35Line 35, Jury duty , Jury duty pay you gave to your employer.pay you gave to your employer.


Adjustments

Itemized Deductions• Every taxpayer can take a specific amount Every taxpayer can take a specific amount

for a for a ““standardstandard”” deduction deduction Reduces taxable income.Reduces taxable income.

• There are certain designated expenses There are certain designated expenses that a taxpayer can choose to list out that a taxpayer can choose to list out separately, and, if they total more than the separately, and, if they total more than the standard deduction, the taxpayer will standard deduction, the taxpayer will ““itemizeitemize”” his deductions his deductions Reduces taxable income by a greater amount.Reduces taxable income by a greater amount.


Itemized Deductions

When to Itemize• A taxpayer can receive a larger deduction by can receive a larger deduction by

itemizing if he/she has:itemizing if he/she has: At the At the Federal LevelFederal Level (higher standard deduction): (higher standard deduction):

• Home mortgage payment Home mortgage payment • Large number of medical billsLarge number of medical bills

At the At the State LevelState Level (lower standard deduction):(lower standard deduction):• Expenses that may/may not have been sufficient to justify Expenses that may/may not have been sufficient to justify

itemization on the federal levelitemization on the federal level

• Reported on Reported on Schedule ASchedule A

Note: If a taxpayer is MFS and his/her spouse itemizes, the Note: If a taxpayer is MFS and his/her spouse itemizes, the taxpayer must also itemize, regardless of whether the taxpayer must also itemize, regardless of whether the

Standard Deduction would be higherStandard Deduction would be higher


Itemized Deductions

Qualifying Expenses• Unreimbursed Medical Expenses

• Charitable Contributions

• Taxes

• Home Mortgage Interest

• Miscellaneous Deductions


Itemized Deductions

Unreimbursed Medical Expenses

• A taxpayer can claim expenses forA taxpayer can claim expenses for Him/HerselfHim/Herself SpouseSpouse DependentsDependents

• He/she can only deduct the amount that He/she can only deduct the amount that exceedsexceeds 7.5% of his/her AGI on federal returns7.5% of his/her AGI on federal returns 4% of his/her AGI on state returns4% of his/her AGI on state returns


Itemized Deductions

Deductible Medical Expenses• Co-pays to doctor, dentist, eye doctorCo-pays to doctor, dentist, eye doctor• Prescription drugsPrescription drugs• Cost of glasses or hearing aidsCost of glasses or hearing aids• Cost of medical equipmentCost of medical equipment• Health insurance premiumsHealth insurance premiums• Long-term care insurance premiums (cap on Long-term care insurance premiums (cap on

amount based on age)amount based on age)• Cost of surgery, operationsCost of surgery, operations• Miles to and from doctorMiles to and from doctor


Itemized Deductions

NOTE: For a complete listing of deductible and NOTE: For a complete listing of deductible and nondeductible expenses see Pub 502 on the IRS websitenondeductible expenses see Pub 502 on the IRS website

Nondeductible Medical Expenses• Life insurance policy premiumsLife insurance policy premiums• Funeral, burial, cremation costsFuneral, burial, cremation costs• Unnecessary cosmetic surgeryUnnecessary cosmetic surgery• Nonprescription drugsNonprescription drugs

NOTE: For a complete listing of deductible NOTE: For a complete listing of deductible and nondeductible expenses see and nondeductible expenses see

Pub 502 on the IRS websitePub 502 on the IRS website


Itemized Deductions

Medical Expenses in TaxWise(Click on the A Detail in the Loaded Forms Menu)



-Medical miles-Insurance premiums paid-Medicare (carries over from 1040 Wkt1)-Other medical expenses (prescriptions, glasses, etc.)

Charitable Contributions• Qualifying

Organizations: ReligiousReligious CharitableCharitable EducationalEducational ScientificScientific LiteraryLiterary

• Nonqualifying Organizations: BusinessBusiness Civic/Political Civic/Political Social Social Foreign Foreign Homeowners' Homeowners'

AssociationsAssociations


Itemized Deductions

Charitable Contributions• Deductible Items:

Monetary donationsMonetary donations Fair market value (FMV) of clothing, furnitureFair market value (FMV) of clothing, furniture Uniforms required to be worn during serviceUniforms required to be worn during service Unreimbursed transportation expensesUnreimbursed transportation expenses


Itemized Deductions

IMPORTANT: The taxpayer must keep receipts!IMPORTANT: The taxpayer must keep receipts!

Charitable Contributions• Nondeductible Expenses:

Raffle, bingo, lottery ticketsRaffle, bingo, lottery tickets TuitionTuition Value of time of serviceValue of time of service BloodBlood Contributions to individualsContributions to individuals The FMV of any good received in exchange The FMV of any good received in exchange

for a donation (i.e. t-shirts, cds, tote bags, for a donation (i.e. t-shirts, cds, tote bags, etc.)etc.)


Itemized Deductions

Charitable Contributions in TaxWise (Click on the A Detail in the Loaded Forms Menu)



-Charitable miles-Charitable cash contributions-Uniforms required for service

-FMV of other than cash contributions

Itemized Deductions

Taxes• DeductibleDeductible

Taxes imposed on and paid by the taxpayer in Taxes imposed on and paid by the taxpayer in 20132013

• Nondeductible Nondeductible Taxes the taxpayer pays for someone elseTaxes the taxpayer pays for someone else Taxes someone else pays for the taxpayerTaxes someone else pays for the taxpayer Taxes not paid during 2013Taxes not paid during 2013


Itemized Deductions

Taxes• Deductible

State and local taxesState and local taxes Real estate taxes Real estate taxes

(Property Tax)(Property Tax) State and local taxes State and local taxes

on a new car purchaseon a new car purchase Ad valorem tax on car Ad valorem tax on car

tags (total paid - tags (total paid - $24.50)$24.50)

• NondeductibleNondeductible Federal taxesFederal taxes Hunting licensesHunting licenses Water/sewerWater/sewer Taxes on alcohol, Taxes on alcohol,

tobacco, or gastobacco, or gas UtilitiesUtilities


Itemized Deductions

Taxes Paid in TaxWise (Click on the Sch A in the Loaded Forms Menu)



-City/county real estate taxes (6)-Personal property taxes (7)-Ad valorem tax, make sure to subtract $24.50 before entering (8)

Itemized Deductions

Taxes Paid in TaxWise (Click on the Sch A in the Loaded Forms Menu)


TaxWise automatically chooses 5a or 5b: -The amount for income taxes automatically fills -Link: Line 5b Sales Tax-Line 1: Enter in AL-Line 3: Check Yes and enter local sales tax (6 for Birmingham)-Line 4: Check Yes and enter 4

Itemized Deductions

Home Mortgage Interest


Itemized Deductions


Home Mortgage Interest in TaxWise (Click on the Sch A in the Loaded Forms Menu)

Enter the amounts for:

-Home mortgage interest and points (10)

-Mortgage insurance premiums (13)

Itemized Deductions

Nondeductible Interest• Personal interest Personal interest

personal loanspersonal loans car loanscar loans credit cardscredit cards etc.etc.


Itemized Deductions

Miscellaneous Deductions• Union duesUnion dues• Uniforms (that cannot be worn in any other Uniforms (that cannot be worn in any other

circumstance)circumstance)• Professional books, journalsProfessional books, journals• Employment-related educational expensesEmployment-related educational expenses• Expenses for looking for a new jobExpenses for looking for a new job• Tax preparation fee from last yearTax preparation fee from last year• Safe deposit boxSafe deposit box• Gambling losses up to amount of winningsGambling losses up to amount of winnings


Itemized Deductions


Miscellaneous Deductions in TaxWise (Click on the Sch A in the Loaded Forms Menu)

Enter the amounts and descriptions for:

-Employment: job travel, union dues, work uniform, job education, literary journal for work, educator expenses (21)-Tax preparation fees (22)-Safe deposit box (23)-Miscellaneous: literary journal not for work, gambling losses from W2-G (28)

Itemized Deductions

Nondeductible Expenses• Burial or funeral expensesBurial or funeral expenses• Wedding expensesWedding expenses• Fees and licensesFees and licenses• Fines, penalties, traffic ticketsFines, penalties, traffic tickets• Home repairs and insuranceHome repairs and insurance• RentRent• Insurance premiums (except health and Insurance premiums (except health and

mortgage)mortgage)• Losses from sale of homeLosses from sale of home


Itemized Deductions

Education Credits• Offset higher education expenses paid Offset higher education expenses paid

during the year during the year The student can be taxpayer, spouse, or a The student can be taxpayer, spouse, or a

dependentdependent

• Partially RefundablePartially Refundable

• Two types of credits available:Two types of credits available: American Opportunity CreditAmerican Opportunity Credit Lifetime Learning CreditLifetime Learning Credit


Intermediate Credits

Education Credits: Eligibility• Filing status cannot be MFSFiling status cannot be MFS

• Qualified expenses paid by taxpayerQualified expenses paid by taxpayer

• CAN claim on the basis of expenses paid CAN claim on the basis of expenses paid with student loanswith student loans

• Accredited institutionAccredited institution

• Taxpayer or student will often receive Taxpayer or student will often receive Form 1098-TForm 1098-T



Education Credits: Dependents• When the student can be claimed as a When the student can be claimed as a

dependent,dependent, Taxpayer must claim credit if taxpayer claims Taxpayer must claim credit if taxpayer claims

the exemption.the exemption. Student must claim credit if taxpayer does not Student must claim credit if taxpayer does not

claim exemption.claim exemption.

• If the taxpayer claims the dependency If the taxpayer claims the dependency exemption, any amount paid by the exemption, any amount paid by the student is considered to have been paid student is considered to have been paid by the taxpayer.by the taxpayer.




American Opportunity (Hope) Credit

Lifetime Learning Credit

Up to $2,500 per eligible student Up to $2,000 credit per return

Available for the 1st 4 years of college Available for all years

Student must be pursuing a degree or recognized education credential

Student does not need to be pursuing a degree or credential

Student must be enrolled at least half time

Available for one or more courses

No felony drug conviction on student’s record

Felony drug conviction does not apply

Expenses include tuition, fees, and course materials

Expenses include only tuition and fees

Education Credits: Form 1098-T



Education Credits: American Opportunity Credit

• 40% (up to $1,000) is refundable (unless the 40% (up to $1,000) is refundable (unless the taxpayer claiming the credit can be claimed as a taxpayer claiming the credit can be claimed as a dependent by his/her parent)dependent by his/her parent)

• Qualified expenses include Qualified expenses include ““Course materialsCourse materials”” (any required books and supplies, whether (any required books and supplies, whether available in regular bookstores) available in regular bookstores)

• Remember, room and board is never a qualified Remember, room and board is never a qualified expense.expense.



Qualified Expenses for Credit• American Opportunity (Hope) CreditAmerican Opportunity (Hope) Credit

Qualified tuition and related expensesQualified tuition and related expenses Includes expenses for course materials (books, Includes expenses for course materials (books,

supplies, and equipment needed for a course of supplies, and equipment needed for a course of study, whether or not they were purchased from study, whether or not they were purchased from institution)institution)



Link: Line 49 8863 Pg 1


PracticeJames takes one course at a local James takes one course at a local

community college. He received a Form community college. He received a Form 1098-T showing qualified tuition expenses 1098-T showing qualified tuition expenses of $1,000. He lives with his parents, who of $1,000. He lives with his parents, who can claim him as a dependent. Who is can claim him as a dependent. Who is

entitled to claim the credit? Which credit?entitled to claim the credit? Which credit?



PracticeJames takes one course at a local James takes one course at a local

community college. He received a Form community college. He received a Form 1098-T showing qualified tuition expenses 1098-T showing qualified tuition expenses of $1,000. He lives with his parents, who of $1,000. He lives with his parents, who can claim him as a dependent. Who is can claim him as a dependent. Who is

entitled to claim the credit? Which credit?entitled to claim the credit? Which credit?

If JamesIf James’’s parents claim him, they must claim the credit.s parents claim him, they must claim the credit.If JamesIf James’’s parents do not claim him, James must claim the s parents do not claim him, James must claim the

credit.credit.Lifetime Learning CreditLifetime Learning Credit



PracticeLaQuandra is a sophomore enrolled at UAB full-LaQuandra is a sophomore enrolled at UAB full-

time. She provides all of her own support. She time. She provides all of her own support. She paid $10,000 in 2013 for tuition and fees for paid $10,000 in 2013 for tuition and fees for enrollment to UAB. She received a tax-free enrollment to UAB. She received a tax-free

scholarship worth $4,000, and paid the rest from scholarship worth $4,000, and paid the rest from a student loan in her name. Can LaQuandra a student loan in her name. Can LaQuandra claim an education credit? Which one? How claim an education credit? Which one? How

much of her expenses are qualified expenses?much of her expenses are qualified expenses?



PracticeLaQuandra is a sophomore enrolled at UAB full-time. LaQuandra is a sophomore enrolled at UAB full-time.

She provides all of her own support. She paid She provides all of her own support. She paid $10,000 in 2013 for tuition and fees for enrollment to $10,000 in 2013 for tuition and fees for enrollment to

UAB. She received a tax-free scholarship worth UAB. She received a tax-free scholarship worth $4,000, and paid the rest from a student loan in her $4,000, and paid the rest from a student loan in her name. Can LaQuandra claim an education credit? name. Can LaQuandra claim an education credit?

Which one? How much of her expenses are Which one? How much of her expenses are qualified expenses?qualified expenses?

Yes Yes American Opportunity or Lifetime Learning Credit. American Opportunity or Lifetime Learning Credit.

Qualified expenses = $6,000Qualified expenses = $6,000


Education Credits: No Double Benefits

• The taxpayer CANNOT claim The taxpayer CANNOT claim Both the American Opportunity (Hope) and Both the American Opportunity (Hope) and

Lifetime Learning credits for the same Lifetime Learning credits for the same qualified tuition expensesqualified tuition expenses

Expenses paid with a tax-free scholarship, Expenses paid with a tax-free scholarship, grant, or other assistance, including Pell grant, or other assistance, including Pell grants (in other words, the taxpayer must grants (in other words, the taxpayer must subtract these scholarships from the total subtract these scholarships from the total expenses before claiming either credit)expenses before claiming either credit)



Foreign Tax Credit



• Taken if a taxpayer paid income tax to a foreign Taken if a taxpayer paid income tax to a foreign country; U.S. possession; or political country; U.S. possession; or political subdivision, agency, or instrumentality of a subdivision, agency, or instrumentality of a foreign country.foreign country.

• Foreign tax paid > $300 is out of our scope!Foreign tax paid > $300 is out of our scope!

• We may see some foreign tax reported on a We may see some foreign tax reported on a 1099-DIV in Box 6.1099-DIV in Box 6.

• Enter the amount of foreign tax paid on Enter the amount of foreign tax paid on Line 47Line 47..

Residential Energy Credit• Nonrefundable credit Nonrefundable credit

• Available to a taxpayer Available to a taxpayer who made purchases for qualified energy who made purchases for qualified energy

efficient improvements for his main homeefficient improvements for his main home Who owns his homeWho owns his home



Residential Energy Credit• Use Form 5695, Part IUse Form 5695, Part I

• Eligible expenses include Eligible expenses include high-efficiency heat pumps, air conditioners, high-efficiency heat pumps, air conditioners,

and water heaters; and water heaters; energy-efficient windows, doors, insulation energy-efficient windows, doors, insulation

materials, and certain roofsmaterials, and certain roofs




Residential Energy Credit• Non-Business Energy Property (home

improvements) Heating, ventilating, air-conditioning, insulation, roofs

water heaters (non-solar), windows, and doors. Part I of the 5695 (IN SCOPE)

• Residential Energy-Efficient Property Credit Solar panels, solar-powered water heaters,

geothermal heat pumps, photovoltaic systems, small wind energy system, fuel cells

Part II of the 5695 (OUT OF SCOPE)


Link: Line 52 5695 Pg 1


Fill in 1a, b and c


Residential Energy Credit


Line 2: Enter any amounts claimed in the previous 4 years

Line 3 (Qualified energy efficiency improvements): 3a: Insulation3b: Exterior doors3c: Roof (metal or asphalt)3d: Exterior windows /skylights

Do NOT include cost of on-site preparation and installation!


Residential Energy Credit


Line 6 (Residential energy property costs):

6a: Electric heat pump, central air conditioner, water heather6b: Natural gas, propane or oil furnace, hot water boiler6c: Main air circulating fan used in natural gas, propane or oil furnace

Do include cost of on-site preparation and installation!


Residential Energy Credit• Taxpayers MAY qualify for an energy

credit for qualified solar electric property costs solar water heating property costs small wind energy property costs geothermal heat pump property costs.

Important: This is outside scope of VITA



Paper Returns: When to Mail• Situations in which a return CANNOT be e-filed:

A dependent has been claimed incorrectly by another taxpayer on a previous return.

The taxpayer has been incorrectly claimed as a dependent on a previous return.

A taxpayer files MFS but does not know his spouse's SSN.

Note: Sometimes, tax returns cannot be e-filed OR the taxpayer simply prefers to mail the return.


Paper and Amended Returns

Preparing Paper Returns in Taxwise

• To set up the return to be filed as a paper return: Federal: On the Main Info Sheet, scroll

midway down and click “Paper” next to Type of Return.

State: On the AL40, scroll to the bottom and click “No” stating that you do NOT want to e-file the return.



Preparing Paper Returns in Taxwise

• Prepare the return as you would normally.

• Print two copies of everything – give one to the taxpayer to keep and one copy to mail.

• Have the taxpayer sign the 1040 and the AL40.



Paper Returns: Final Notes• Paper returns take much longer to process

than e-filed returns.

• Refunds can still be directly deposited on a paper return – just include this information in TaxWise.



Amended Returns• Once a tax return has been accepted by

the IRS, it cannot be changed without submitting an amended return.

• A taxpayer should amend his return if Anything was excluded that affects taxable

income OR Tax liability OR If anything was reported incorrectly



Amended Returns• Common reasons returns must be

amended: Taxpayer receives another W-2 Taxpayer remembers another source of

income Taxpayer wants to add itemized deductions A dependent was mistakenly claimed



Amended Returns• If we completed the return, you will be

able to pull it up in TaxWise to amend it.

• If someone else completed the return, you will need to re-key the original return that was submitted (exactly as it was submitted) before you can amend it.



Amended Returns: First StepsBEFORE MAKING ANY CHANGES TO THE RETURN

• Add a 1040X.• IMPORTANT: On the 1040X, click the check-box

that says “Check this box to override.”• If the AL return must be amended, click the box

at the top of the AL40 that says “Amended Return.”



Amended Returns: Making Changes

• Once you check the appropriate boxes on the 1040X and the AL40, make any needed changes to the tax return. Add a new W-2. Add or take off a dependent. Change filing status. Etc.

• All changes will be recorded on the 1040X.



Amended Returns: Important Lines

• Line C: explains what changes are being made to the tax return and why

• Line 15: indicates if the taxpayer already made a payment

Note: A new amount owed or refunded will be Note: A new amount owed or refunded will be

listed once ALL changes are madelisted once ALL changes are made



Amended Returns: Filing• Amended returns cannot be e-filed.

• Print 1040X AND AL40 AND any new schedules that have been added (if

applicable)

• Include documentation of changes (if necessary – e.g., a new W-2).



Amended Returns: Final Notes

• Print the ENTIRE pdf for the taxpayer's records (e.g., the 1040X and the resulting 1040 after changes).

• Warn the taxpayer that it may take weeks for the IRS to process an amended return.

• Refer the taxpayer to 1-800-829-1040 if they have further questions about when the return will be processed.



PRACTICE• Complete the Fleming exercise on your

own

• Twonline.taxwise.com/training

• Client ID: 778068

• User Name: all caps, last name then first initial, e.g. Rachel Green GREENR

• Password: user set OR if password gets reset, password will be same as username


Additional Topics on 2013 Advanced Test

• Pull out your “Helpful Tips for Additional Topics on the 2013 Advanced Test” packet

• The following topics will appear on the 2013 Advanced Certification Exam BUT will be out of scope for you at the tax site.

• Campus Fellows = SaveFirst Intermediate Level

• The following topics MUST be performed by an Impact Site Coordinator (or SaveFirst Advanced Level) at the site. Capital gains (sale of stock, capital loss carryover) Retirement Income with Taxable Amount Not Determined Schedule K-1: Interest Income, Royalty Income


Sale of StockSale of stock = Capital Gains

GAIN = AMOUNT REALIZED – ADJUSTED BASIS

In Layman’s Terms…

GAIN = MONEY YOU GET – MONEY YOU PAID

BASIS: original cost of the asset. BASIS: original cost of the asset.

ADJUSTED BASIS: original cost of the shares of stock ADJUSTED BASIS: original cost of the shares of stock

increased or decreased to account for commissions, increased or decreased to account for commissions,

fees, depreciation, etc.fees, depreciation, etc.

Sale of Stock

SaveFirst Advanced Training ● 2012 ©

Holding Period• Period starts the day after the property is

acquired and continues through the day it is sold

Sale of Stock

Short-term:Short-term:held for one year or held for one year or

lessless

Long-term:Long-term:Held for more than Held for more than

one yearone year

Inherited property is ALWAYS long-term.


Reporting Income from Sale of Stock

Line 13 (if long-term)

Sch D Pg 1

8e, 9e or 10e

8949 Pg 1

3a

Cap Gn Wkt

Sale of Stock

Line 13 (if short-term)

Sch D Pg 1

1e, 2e or 3e

8949 Pg 1

1a

Cap Gn Wkt

View screen shots in your Helpful Tips packet

Carryover Losses• Loss that can be claimed in one year is the

lesser of: The total loss OR $3,000 ($1,500 if MFS)

• Unused portion of loss can be carried over from year to year until total loss is claimed Remains long-term or short-term. If not claimed in some year, unused loss is decreased

by the amount that should have been claimed.

• Report carryover losses on Sch D Pg 1.• Line 6 (short-term) or line 14 (long-term).

Sale of Stock


Sale of Stock


Reporting Carryover Losses: Sch D

Retirement Income: Taxable Amount Not Determined


Simplified Method

• Calculates tax-free portion of each pension or annuity payment

• Calculates taxpayer’s cost basis for each monthly payment

• Basis – amount the taxpayer paid in to the plan that is being distributed in each monthly payment

Taxpayer’s cost basis = Monthly Tax-Free

# of monthly payments Portion

Simplified Method

Taxable Portion of Retirement Distributions



- Cost in plan at start date from 9b of 1099-R (line 1)

- Age at start date (line 2)

- Number of months payments were received in 2013 (line 4)

- Amount recovered tax free in prior years (line 5) Use Form 1099-R Simplified Method

Worksheet in Income Tab of Pub 4012!

Simplified Method

Taxable Portion of Retirement Distributions


TaxWise Calculates:

-Line 3 Exclusion per month-Line 6 Exclusion

Automatically pulls through to Line 16b on 1040.

Do NOT fill in box 2b on 1099-R – it should remain blank.

Use Form 1099-R Simplified Method Worksheet in Income Tab of Pub 4012!

Sch K-1: Interest and Royalty Income

• Reports the taxpayer’s share of income or distributions from partnerships, S Corporations, and some estates & trusts.

• Some interest income and royalty income is reported on a Sch K-1

Schedule K-1

Reporting Income from Sch K-1

Schedule K-1

Type of Income Where to ReportTaxable Interest Income 1040 Line 8a Sch B

Line 1b Interest Stmt

(same as interest income from 1099-INT)

Royalties 1040 Line 17 Sch E Pg 1 1*C K1 P/S Pg 1 Line 7/6 (use

code 6 in Part 1)


PRACTICE• Let’s complete practice scenarios 1 and 2

in your “Helpful Tips” packet together

• You should use this packet and these exercises as a guide for the advanced topics when completing the certification exam


Additional Duties• Quality Review

• Volunteer organization

• Crowd Control

• Appointment confirmation

• Paperwork


Additional Duties

Quality Review• We must thoroughly quality review EVERY

RETURN (E-file and Paper)

• Campus Fellows may assist Site Coordinators to conduct Quality Reviews

• USE TAB 4 IN YOUR CAMPUS FELLOW MANUAL FOR ALL QUALITY REVIEWS!


Additional Duties

Volunteer Organization• Make sure that everyone signs in

(Campus Fellows: set a good example!)

• Place volunteers in stations

• Partner volunteers in such a way that they are both comfortable and competent

• Keep students busy!

• Enforce “Volunteer Dos and Don'ts”


Additional Duties

Crowd Control• Make sure each taxpayer signs in at the

door

• Direct taxpayers to the Intake and Interview Forms

• Place taxpayers with available volunteers


Additional Duties

Appointment Confirmation• Talk to the Site Coordinator about assisting with day-

before appointment reminder calls• Call all appointments 24 hours before

Identify Self and Organization (you may need to say “the tax people”)

Confirm appointment time (make a note if the taxpayer mentions he/she might be late)

Remind the taxpayer to bring Social Security Cards, W2s, and other tax forms; if filing jointly, spouses both need to come in

• Call taxpayers who do not show up for appointments to reschedule

• See script on Pg 6 in your Campus Fellow Manual


Additional Duties

Paperwork Requirements• Items for TAXPAYER (AND SPOUSE) to

complete DURING the return: INPUT pin # for Main Information Page in Taxwise Confirm “I authorize” selection on Federal Form 8879 Confirm “I authorize” selection on Alabama Form

8453 INPUT pin # on consent to use form (“Gen Use” in

Taxwise) INPUT pin # on consent to disclose form (“Gen

Disclose” in Taxwise)


Paperwork Requirements• Forms to print for an E-file return:

1 copy of the entire return for the taxpayer’s records (including copy of 8879 and 8453)

Extra Form 8888, if applicable

• Forms for taxpayer to complete/sign: Federal form 8879* Alabama form 8453* Consent to use/disclose forms ONLY IF volunteer enters pin #

on consent to use in Taxwise for taxpayer SNWL paperwork, if applicable


Note: These signed forms are then given back to the taxpayer for their records. We keep electronic copies only.

Paperwork Requirements

• Forms to retain for our records: Completed Intake/Interview & Quality Review

Sheet Signed copies of consent to use form and

consent to disclose form ONLY IF volunteer enters pin # on consent to use/disclose forms for taxpayer

Completed SNWL paperwork and Form 8888, if applicable


Assisting the Site Coordinator• Always ask the Site Coordinator if there is

anything you can do to help her/him!


Understanding the Intake/Interview Form and

Conducting a Thorough Quality Review for Every Taxpayer

Required for Use by IRS VITA Sites

• An important tool for accuracy and due diligence!

• Must be completed by (or with) the taxpayer.

• Must be used to conduct the Quality Review process.

• Must be used when e-filing tax returns.

• Must be kept on file in our site records.

The Intake Process: Completing Form 13614-C

• In most cases, the taxpayer completes pages 1 and 2 of the Intake Interview Form (Form 13614-C) in the waiting room before meeting with a tax preparer.

• Provide assistance as needed

Complete an Intake/Interview Form for EVERY Return

• We MUST have an intake/interview form on file for EVERY return filed at our tax sites.

• If multiple/prior year returns: Go to IRS.gov and print out the

Intake/Interview form from that tax year Complete an intake/interview form for EVERY

year for which the taxpayer is filing

The Intake ProcessReturn and Volunteer Certification Levels

It is a violation of our VITA Grant and IRS Compliance and your Volunteer Standards of Conduct Agreement to file a tax return that is out of scope of the VITA tax site.

• At SaveFirst sites, to ensure all returns are in-scope for VITA:

Consult the Scope of Service Chart – at every tax station, in the Pub 4012 Volunteer Resource Guide, and in your Campus Fellow Manual

If a topic seems complicated or unfamiliar to you, double-check the Scope of Service Chart to be sure it is listed in scope.

Sometimes this determination may be unclear. If you are unsure, ask your supervisor.

The Intake ProcessReturn and Volunteer Certification Levels

• Remember, SaveFirst volunteers are following slightly different scopes than the IRS’s levels of certification.

• Reference your SaveFirst Scope of Service chart in your Campus Fellow Manual, pgs 16-19 if you have questions

• Remember: Campus Fellows are Intermediate Level Volunteers

If part of a taxpayer’s return will be out of scope for the volunteer preparer, but will be in scope for you, the site coordinator, or your Campus Fellows, then if you are busy you may have the volunteer begin the return and stop when they have completed all of the topics within their scope.

Turn to Tab 4, pages 22-26 in your Campus Fellow Manual for the “Process for Conducting a

Thorough Quality Review”

Let’s Conduct a Quality Review!

• With a partner, complete a thorough Quality Review of each other’s Fleming tax returns.

• Discuss any issues you come across with your “taxpayer” (partner) and ask any relevant questions.

Campus Fellow Manual• USE THIS AT THE TAX SITE!!


Campus Fellow Manual• Tab 1: Site Information

Remember: Each tax site has a unique Client ID! Make sure you use the correct Client ID!

Important phone numbers, Local IRS and SSA Offices


Always talk to your Site Coordinator if you have questions BEFORE calling one of these numbers with a

question or referring your taxpayer to any of these numbers.

Campus Fellow Manual• Tab 2: Site Organization and Set-Up

Site Coordinator’s Daily Checklist: Ask your site coordinator how you can assist them!

Day-Before Call Script, pg 6 Documents/Forms to be kept on site (just for

reference)


Campus Fellow Manual• Tab 3: Volunteer Information

Volunteer FAQ Volunteer Etiquette Guide What Issues Can I Handle? (Campus Fellows

are Intermediate) Scope of Service Chart Form 13614-C Intake/Interview Job Aid for

Volunteers

Read through this before coming to the tax site!


Campus Fellow Manual• Tab 4: Finishing a Return

Pgs. 22-26: Process for Conducting a Thorough Quality Review

• USE THIS EVERY TIME you do a Quality Review!! Consent to Use and Disclose Forms (Read

through this before you come to the tax site)

Paper Returns Amended Returns


Campus Fellow Manual• Tab 5: 1040 and Forms

Form 1040 Form AL-40

• Alabama Tax Laws

Various Income Forms• Important information re: codes on 1099-Rs, W-2s

Itemized Deductions 1098-T Tuition Statement Information Additional forms you may see


Campus Fellow Manual• Tab 6: Save Your Refund

Completing Form 8888 Entering taxpayers into the prize drawing


Campus Fellow Manual• Tab 7: Alabama Exempt Defined Benefits

Plans Lists defined benefits plans exempt from AL

taxes Check this list first when trying to determine if

a plan is defined benefits


Campus Fellow Manual• Tab 8: Campus Fellow Summary Chart

Line by line instructions for entering taxpayer information into TaxWise


Volunteer Etiquette• Follow the Quality Site Requirements.

• Conduct a thorough interview.

• Be sensitive to the taxpayer.

• Keep personal information confidential.

• Do only what you are trained and certified to do.

Ethical Violations

An ethical violation is a knowing breach of any of the volunteer standards of conduct

All VITA volunteers must undergo training on volunteer standards of conduct to avoid ethical violations

The IRS uses reviews called SPEC QSS to determine the accuracy rate and possible violations at tax sites.

Ethical Violations Consequences of intentional violations impact

both the volunteer and the organization The volunteer may be removed from VITA and face

criminal investigation SaveFirst might lose its IRS grants and the EFIN

number that allows it to operate tax sites

• NOTE: If you make an accidental mistake, you are protected as a volunteer by the VITA program. And ultimately, taxpayers are responsible for the information that is entered on their return.

Quality Site Requirements

Every return must be prepared by a volunteer with the proper level of certification needed for that return. Returns should be assigned after the level of certification needed and the certification level of the preparer have been determined and match up.

Every volunteer has to use the Intake/Interview sheet in preparing a return.

Quality Site Requirements The volunteer must verify the taxpayer

has photo ID, social security cards for themselves and any dependents they are claiming, and all income documents as soon as possible.

Taxpayers should be informed that they are ultimately responsible for any information they gave us.

Other Violations

VITA is a volunteer service. We can not accept cash, solicit donations, or have a donation/tip jar in the entry, waiting, tax preparation, or quality review areas of the tax site.

Never use or keep a taxpayer's confidential information for personal gain. This includes soliciting a personal business, offering to receive and turn over a refund for a taxpayer without a bank account, or even asking a taxpayer on a date if you notice they are filing single.

Other Violations• If you feel a taxpayer is providing

fraudulent information, you are not required to complete their return.

• Never knowingly prepare a fraudulent return.

• Talk to your supervisor (discretely) if you are concerned about a taxpayer’s return or about information they are providing.

Standards of Conduct Test• All volunteers must complete and pass the

Volunteer Standards of Conduct Test before volunteering at the tax site

• Take the test (in your training materials), and we’ll grade it now! PUT YOUR NAME ON THE TEST! Open-book, open-note; refer to the training

materials as you complete the exam Turn in to your trainer when you finish

Schedule and Online Availability Forms

• You will be scheduled for regular weekly shifts between January 20 – March 8 based on your Campus Fellow Agreement

• On Saturdays, you should be prepared to travel (e.g., Decatur, Montgomery, Gadsden, etc.)

• You will be reimbursed for mileage and meals.

• Please complete the appropriate Campus Fellow availability form online (www.impactalabama.org/taxprep). You must complete this form NOW.


Volunteer Paperwork• If you did not attend the fall training in

person, please fill out the following forms and return them to your trainer: Volunteer Agreement Confidentiality and Liability Form Media Release W-9

If we do not have this paperwork, you cannot receive your stipend or reimbursement!


Certification• Remember to take the IRS Advanced

Certification by JANUARY 17.

• Use Classmarker to submit your answers.

• The link to Classmarker is at www.impactalabama.org/taxprep


savefirst campus fellow intermediate tax training: january refresher 2013-14

Documents

income slide

wkt1 savefirst basic

training outline

income social security

selfemployment income

previous years income

basic volunteers

social security benefits