1 DISTRICT 5 TRAINING 2011 WHAT'S NEW IN 2011? What we are going to cover: 2010 Tax Relief Act -...

1DISTRICT 5 TRAINING 2011

WHAT'S NEW IN 2011?

What we are going to cover:

2010 Tax Relief Act - New tax provisions in 2011

Items affecting tax preparation in 2011 and beyond

Training and Certification


TAX RATES CONTINUED*

The 2010 Tax Relief Act: Extends all individual rates at 10, 15, 25,

28, 33 and 35 percent Continues for two years – through

December 31, 2012

* Affects 2011 and 2012 tax returns


PAYROLL TAX CUT

The 2010 Tax Relief Act reduces the employee-share of Social Security taxes from 6.2% percent to 4.2%

The change is for wages earned in calendar year 2011 up to the taxable wage base of $106,800

Self-employed individuals will pay 10.4% (down from 12.4%)on self-employment income up to the threshold


QUALIFIED CAPITAL GAINS AND DIVIDENDS*

Qualified capital gains and dividends currently are taxed at a maximum rate of 15 percent (zero percent for taxpayers in the 10 and 15 percent income tax brackets)

The 2010 Tax Relief Act continues for two years – until December 31, 2012



Schedule D and Form 8949

Schedule D for 2011 – has new reporting lines using Form 8949 (New in 2011)

Form 8949 has three boxes that need to be completed for each taxpayer Box A – Cost basis shown on 1099-B Box B – Cost basis not shown on 1099-B Box C – No 1099-B received


SCH D & FORM 8949, cont’d

For each asset sold, the 1099 will have an A/B/C designator

Assets can no longer be entered on Schedule D

All assets information goes on Forms 8949 Page 1 is for short term; Page 2 is for long

term


SCH D & FORM 8949, cont’dTab 2

In TaxWise, Capital Gain or Loss Transactions Worksheet (Cap Gain Wkt) will load 8949s and put assets on appropriate pages

Long Term/Short Term Capital Gains/Losses Wkts will no longer be in Forms list

A/B/C designators will be located on Cap Gain Wkt under 1099 column

Column (b) is code for adjustments to gain/loss, wash sales, exclusion of gain on main home, etc

Column (g) is the amount of the adjustment


SCH D & FORM 8949, cont’d

Column (b) is for gain/loss adjustment codes; see F1 help and Form 8949 instructions

Column (g) is for amount of adjustment


A

B

C

D

F

M


CAPITAL GAINS ENTRY - 2011 TAXWISE


Capital Gains Transactions – 2011


1040 – Page 1


Standard Deduction/Exemptions

Standard deduction MFJ - $11,600 (up $200) Head of Household and $8,500 (up $100) Single/MFS - $5,800 (up $100)

Personal/Dependency Exemption $3,700 (up $50)


CHILD TAX CREDIT

The 2010 Tax Relief Act extends the $1,000 child tax credit for two years, through December 31, 2012.

The qualifying child must be under age 17 at the close of the year and satisfy relationship, residency, support, citizenship, and dependent tests.


EITC AND DEPENDENT CARE

Extends the enhanced EITC for two years (i.e., three or more qualifying children)

Extends the enhanced dependent care credit and eligible expenses for two years From $2,400 to $3,000 and $4,800 to

$6,000 for more than one qualifying individual

Maximum credit from 30% to 35 % of qualifying expenses


EITC

Earned Income and adjusted gross income (AGI) must each be less than: $43,998 ($49,078 married filing jointly)

with three or more qualifying children $40,964 ($46,044 married filing jointly)

with two qualifying children $36,052 ($41,132 married filing jointly)

with one qualifying child $13,660 ($18,740 married filing jointly)

with no qualifying children


EITC (continued)

Tax Year 2011 maximum credit: $5,751 - three or more qualifying

children $5,112 - two qualifying children $3,094 - one qualifying child $464 - no qualifying children

Investment income must be $3,150 or less for the year.

Advance EITC no longer exists.


AMT PATCH*

The 2010 Tax Relief Act increases the exemption amounts for 2010 and 2011: $47,450 for individual taxpayers $72,450 for married taxpayers filing

jointly and surviving spouses $36,225 for married couples filing

separately.



Standard Mileage Rates

Beginning on Jan. 1, 2011, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 51 cents/mile for business miles (55.5

cents effective 07/01/2011) 19 cents/ mile driven for medical or

moving purposes 14 cents per mile driven in service of

charitable organizations


LTC Premiums deduction

For 2011, the maximum amount of qualified long-term care premiums includible as medical expenses has increased on Schedule A (Form 1040) Itemized Deductions (per person) $340 - Age 40 or under $640 - Age 41 to 50 $1,270 - Age 51 to 60 $3,390 - Age 61 to 70 $4,240 - Age 71 and over


EXTENDERS

Qualified Charitable Distributions from certain individual retirement plans for charitable purposes (thru 2011)

Deduction for educator expenses in figuring AGI (thru 2011)

Tuition and fees deduction in figuring AGI (thru 2011)

Itemized deduction for state and local general sales taxes (thru 2011)


EXTENDERS(continued)

American Oppor Tax Credit (thru 2012) Child tax credit of $1,000 and the earned

income threshold of $3,000 for the child tax credit (thru 2012)

Private mortgage insurance deduction (through 2011)

Non-business energy property credit (with some limitations) (thru 2011)

EITC increased credit for three or more qualifying children (thru 2012)


Non-business Energy Property Credit

This credit has been extended for 1 year with a reduced rate of 10%.

Amounts provided by subsidized federal, state, or local energy financing do not qualify for the credit.

The energy-efficiency standards for qualified natural gas, propane, or oil furnaces, or hot water boilers have been increased.


Non-business Energy Property Credit (continued)

For 2011, the credit is limited as follows. Total combined credit limit of $500 for all tax years

after 2005 (Form 5695, Part I). Combined credit limit of $200 for windows for all the

amount of your tax years after 2005. Maximum credit for residential energy property costs:

$50 for any advanced main air circulating fan; $150 for any qualified natural gas, propane, or oil

furnace, or hot water boiler; $300 for any item of energy-efficient building

property.


Residential Energy Credits


IRS CHANGESFOR VITA-TCE

Lump-sum social security payments are included as Basic competency Last year, only current year taxability in

scope, but use of numbers from previous year returns in scope this year

No second copy of Form 8879 and income attachments, i.e. W2s’, 1099s’, etc retained at the site or by the ERO SPEC no longer requires copy for storage; taxpayer still

signs single copy prior to efile submission and retains the copy with their tax records


NEW PREPARER USE FORM

Dedicated to Preparer’s Use Fields Prep Use Fields no longer on Main Info

Sheet Prep Use Fields increase from 15 to 25

Standardized to 15-character alphanumeric

Enter up to 25 questions in column A


All Preparer Use Field entries will be stored for reporting purposes (not the question)

Accessible via the report server Taxpayer Reminder Field will be added

Enter information you need to convey to preparer for following year

Will automatically display when return is started in TY 2012 (January 2013)

PREPARER USE FORM, cont’d


Intake/Interview & Quality Review Sheet

Form 13614-C


RECORD KEEPING

Beginning 2011 tax filing season, we no longer will retain and send to the IRS: A signed copy of Form 8879 and income

statements (W2, W2G and 1099s’) AARP will no longer permit retaining a copy

with supporting documents at the site except for use with Form 8453 mailing

This will require sites to revise their e-filing procedures


Tracking of Returnsfor E-filing

Each site will track returns to make sure the ERO knows which returns are ready for e-filing

Returns must be transmitted and accepted in a timely manner.

Each site must adopt a method to protect TP data and privacy


Taxpayer Data and PrivacyPolicy

The Site or ERO will not keep any forms or documents with a taxpayer identity and/or SSN that is not mandated by the IRS or a State. ie. Form 8453 if used for mailing


Site sign-in/log sheet In addition to using Return Stage in TaxWise; The site will record on the site sign-in/log sheet

the status of the return: Ready to e-file; Waiting for signature of Form 8879; Return will be paper filed; Waiting for Taxpayer documents Question only – no return prepared


Modified TaxAide Site Sign-In Sheet


Activity Report for Reporting


Activity Report for Tracking E-File Returns - Transmitted


Activity Report for Tracking E-Files - Acknowledged


Line Added on AZ140 for Unpaid Use Tax

47NTTC/NTC ERO Training 2011


SUPPORTING DOCUMENTATION

Pub 4012 Volunteer Resource Guide Pub 4491 (hard copy or CD) Training Guide Pub 4491W Comprehensive Problems &

Exercises Pub 17 Your Federal Income Tax Guide Pub 6744 Volunteer Test/Retest


TRAINING & CERTIFICATION

Counselors – six (6) steps Noncounselors – four (4) steps All must pass IRS Standards of Conduct test

with 80% accuracy All must sign Volunteer Standards of Conduct All Counselors must pass IRS test at 80%,

Standards of Conduct, Basic, Intermediate & Advanced levels, using Pub 6744 or IRS Link & Learn test system


Volunteer Training ProcessFor Volunteers Not Providing Tax

Assistance


Standards of Conduct Training

Training module in Pub 6744 and Link and Learn

Includes 6 Standards of Conduct Includes 10 Quality Site Requirements All volunteers must answer 4 of 5 questions

correctly


VolunteerStandards of Conduct Agreement –VITA/TCE Programs

Form 13615


Training on TaxWise

Train on TW11 2011 returns TWO EROs can setup training users for both

TW10 and TW11 TW11 users will carryover to TW11

Desktop EROs can setup TWO training users for both TW10 and TW11 Training TWO will be deactived 2/12

Procedure available on AZ TaxAide


Take the Test On L&L All counselor can certify on L&L Problems can be prepared on Practice Lab,

TWO or desktop Form 13615 Volunteer Agreement can be

printed when test completed Biggest Advantage – Instructor don’t have to

grade test See document [Take the Test Using Link &

Learn (11/14)


Counselor Certification Process

Preferred: Take test on L&L, print out results (printed on form 13615), sign and provide to instructor or LC. Instructor or LC reviews 4 exercises completed by counselor and resolves any errors

Can take test manually using Pub 6744 and provide answer sheet to instructor or LC for grading.


Counselor Certification Continued

Lead instructor should collect Form 13615 and inform LC of certified counselors

All Form 13615s must be signed by instructor & a copy submitted to Sandy Liska either by mail, fax or email.

8103 E Southern Ave Lot 73 Mesa AZ 85029-3508 480-380-1505 [email protected]


Counselor Certification Continued

If LC grades the test and has the counselor sign Form 13615, the form should be signed by the LC, a copy sent to Sandy and the instructor should be informed.

The Form 13615s should be retained at the local level until the end of the season

Sandy will provide the list of certified counselors to the IRS


Recommended Exercises Baylor – Military retiree, wife has died, caring for

grandchild, div, pension, SS, and itemized deductions Fleming – Divorced woman, 2 kids, INT, IRA, pension,

self employment, W-2, EITC Sterling – Retired couple, INT, DIV, stock sale, pension

and SS Kent Comprehensive – Most everything except EITC.

Line by Line answers


Other Training District must decide approach to train ERO’s. Reference ERO Presentation on Extranet As a minimum, a mentor (experience ERO) should

be assigned to any new ERO Client Facilitator and any other volunteer must pass

Standards of Conduct test Reference Client Facilitator training on the Extranet


Reference Material on Extranet 2011 Training Guide Power Point Training Slides Client Facilitator Training ERO Training Volunteer Standards of Conduct Volunteer Standards of Professionism Volunteer Certification Process Alternate Training Options Taxpayer Information and Responsibilities Volunteer Portal - Overview


Reference Material on AZ Web Site

1099 SSA Lump Sum Payment Arizona Return Requirements Duck Book TWD & TWO Flow Chart Dependents/Exemptions HAS Training Sch C Training Test Using L&L Use Form D19597 to Track efiles Volunteer Certification Process P4961 Volunteer Stds Of Conduct Training


AARP Tax-Aide Volunteer Portal

65 2011 Regional Meetings – St Louis

A web-based and centralized access point that provides a single and secure access to All AARP Tax-Aide Information, Applications, Databases and Reporting•Accessibility based on volunteer title and other requirements•Simplification and consistent presentation of the forms, tools and interfaces used for data entry, search and reportingTraining Materials on the Portal and all applications

can be found on the Extranet Training Tabhttp://assets.aarp.org/www.aarp.org_/taxaide/www.aarp.org/sk/taxaide/training.html


Future Portal ApplicationVolunteer ShareNet (Formerly Extranet)

66 2011 Regional Meetings – St Louis

• Move Extranet contents currently open to the public and maintained by AARP IT to secured and easy to use interface to be called “Volunteer ShareNet”

• Contents can be updated by Tax Aide staff at any time• Access to the contents is determined by the user’s volunteer positions• Systems maintained in parallel during transition

Volunteer ShareNet in PORTAL

EXTRANET


Sample Volunteer ShareNet Screen

672011 Regional Meetings – St Louis


Portal Registration Roll Out

Portal registration requires all AARP Foundation Tax-Aide Volunteers to have a unique email address.

E-mail address may not be shared with another volunteer, AARP member or AARP. org registered user.

ADS and National Office will assist in case of a conflict with E-mail addresses.


Portal Pre-Registeration

Volunteers who are not already registered by the listed dates below will be pre-registered by the National Office using their existing VMIS Tax-Aide E-mail address as the Login ID. All Leaders – 12/31/11 All Existing Non-Leaders – 1/15/12 All New & Returning Volunteer – 2/15/12

Volunteers will be provided with a Password by E-mail upon registration.


That’s All Folks!

Questions??

1 DISTRICT 5 TRAINING 2011 WHAT'S NEW IN 2011? What we are going to cover: 2010 Tax Relief Act -...

Documents

Transcript of 1 DISTRICT 5 TRAINING 2011 WHAT'S NEW IN 2011? What we are going to cover: 2010 Tax Relief Act -...