EKS Training

Housekeeping

Classroom ground rulesoAsk when unsureoDo not be disruptive when instructor is teachingoNo side conversations: if you have a question ASKoBe respectful to your peersoTurn Cell Phones to silentoWait for instructor prompt to begin computer work

Class Structur

e

5 Step Plan:

1. As a class we will review Client Notes, and

2. Intake & Interview Sheet & supporting documents.

3. Instructor will teach Tax Law – referencing Pub 4012 and 13614-C

4. Instructor will show you how to enter information into TaxWise. WATCH!

5. Now Do! Students will enter information on TaxWise

Scenario #2

Scenario #2

What you will learn in this scenario:

1. Determining Filing Status

2. Exemptions: Dependency

3. Credits- Refundable vs Nonrefundable

EITC – CTC – Advanced CTC- Dependent Care

4. Determining Itemization

Scenario #2

Let’s review Olivia’s Information:

Pull out Interview NotesPull out Intake & Interview sheet

13614-C

Interview

Notes Review

What’s different in this scenario?Any questions you have when reviewing the notes?

Review 13614-C to ensure responses match

Intake &

Interview

Let’s review 13614-C

Everything accurate? If not, what’s missing/wrong/needs to be changed?

Notice anything different?Did they have all the required documents?

Make any corrections needed on 13614-C

Lets look at the Job Aid in Pub 4012, pages 15-16.

Publication

4012

Is client eligible for VITA services?

Refer to Publication 4012 page 8-9

Scope of Services Chart

Tax Law Topic #1

Dependency Exemption:

Review personal exemption and dependency exemption

What is a “qualifying child” or “qualifying relative”?

Open: Publication 4012 Tab C

Tax Law Topic #1

What exemptions will Olivia take?

Does Nicholas qualify as a “qualifying relative”?

Review

13614-C

Review 13614-C, Part II, numbers 1 &2

Based on decision tree, what is Olivia’s filing

status?

Tax Law Topic #2

Filing Status: What is Olivia’s filing status?

Open: Publication 4012, Tab B

TaxWise

Let’s start:

Enter Olivia’s: Personal information on Main Information page

Income documents: W2 & 1099- INT

Refer to Publication 4012, Tab D

Tax Law Topic #2

Adjustments to income: What are adjustments to income?

Does Olivia have an “adjustment to income”?

Let’s Open Publication 4012 Tab E-5&

Olivia’s 13614-C

TaxWise

Instructor:

Enter Olivia’s: 1098 E

Refer to Publication 4012, Tab E-5

Students: WATCH instructor

TaxWise

Students: Enter Olivia’s 1098 E

Refer to Publication 4012, Tab E-5

Tax Law Topic #3

Deductions:Common deductible expenses:

Unreimbursed Medical Expenses Charitable Contributions

Let’s Open Publication 4012 Tab F

& Schedule A

TaxWise

Instructor:

Let’s enter Olivia’s deductions.

Refer to Interview notes & Publication 4012, Tab F-3

Students: WATCH instructor

TaxWise

Students: Enter Olivia’s deductions

Refer to Publication 4012, Tab F-3

TaxWise

Should Olivia itemize her deductions?

Refer to Publication 4012, Tab F

Tax Law Topic #4

Tax Credits: Two Types: Refundable & Nonrefundable

Refundable Credits allows taxpayers to lower their tax liability to zero and everything over zero they get as credit/payment.

Nonrefundable Credits allow taxpayers to lower their liability to zero.

Tax Law Topic #4

Nonrefundable Credits: Child & Dependent Care Expenses (pub 4012,

Tab G-3-5)

Education Credit (pub 4012, Tab J-4)

Child Tax Credit (pub 4012, G-8-9)

Refer to Publication 4012, Tab G1040, Tax & Credits, Lines 48-54

Tax Law Topic #4

Refundable Credits: Advanced Child Tax Credit (pub 4012, Tab G-8)

Earned Income Tax Credit (pub 4012, Tab I)

Refer to Publication 4012, Tab G & I

1040, Payments, Lines 66-72

Tax Law Topic #4

What credits can Olivia possibly qualify for?

TaxWise

Child & Dependent Care Credit

Instructor:

Enter Olivia’s childcare expenses

Refer to client documents &

Publication 4012, Tab G-3

Students: WATCH instructor

TaxWise

Students: Enter Olivia’s childcare

expenses

Refer to Publication 4012, Tab G-5

TaxWise

Education CreditInstructor:

Enter Olivia’s education expenses

Refer to client documents &Publication 4012, Tab J

Students: WATCH instructor

TaxWise

Students: Enter Olivia’s education

expenses

Refer to Publication 4012, Tab J

TaxWise

Let’s Review Auto-populated credits on TaxWise:

Did Olivia qualify for these credits? Child Tax Credit

Advanced Child Tax Credit Earned Income Tax Credit

Let’s review 1040 to see!

Completing the

CA return

THINGS YOU NEED TO KNOW ABOUT THE CA STATE RETURN:

1. Get the red out! Most information will automatically populate from the federal return

2. If you have entered more than one W-2 on the 1040, you will have to manually add the additional W-2’s. The first W-2 will carry over, but the rest won’t.

3. Make sure to complete the direct deposit or balance due portion of the return

4. Complete the CA Renters Credit Wkt when applicable.

Savings Initiativ

e

Let’s Watch!

WHY

Wrapping up Retur

n

Let’s Review Olivia’s return

Does Olivia want to direct deposit her refund?

If so, is she requesting to split her refund?

Pull out 13614-C, Part VII

HOW

Splitting the

Refund

Instructor: Enter Olivia’s bank

information on Form 888

Open Publication 4012, Tab K-2

TaxWise

Students: Fill Out Form 8888

Finishing the

returnPub 4012,

Tab K

THINGS YOU NEED TO KNOW ABOUT FINISHING A RETURN

1. All returns will be e-filed (unless otherwise specified)

2. Bank account information needed for direct deposit- refer to Part VII of the Intake Sheet

3. Identity Protection PIN- if client checked the “yes” in box 12 of the Intake Sheet, refer to Pub. 4012, Tab P-1

Quality

Review

Let’s check our work!

Do we have matching AGI?Let’s review entry of:

- W2- 1099-INT- 1099-E- 1098-T

Knowledge

Check!

Can an unmarried person claim “head of household” status?

Yes, if they provide more than half of the cost of keeping their home and a “qualified person” lived with them for ½ the year.

True or False: The term “dependent” means a “qualifying child” or “qualifying relative”?

True

A taxpayer must have this to qualify for EITC?

Earned Income

Where in the 4012 can you find examples of earned income?

Pub 4012, Tab I-1

Knowledge

Check cont...

True or False: Laura’s foster son Jack is 12. He is a US citizen, he lives with Laura and she provides his full financial support. Is Jack a qualifying child for the child tax credit?

True

The tax credit for child and dependent care expenses allows taxpayers to claim a credit for expenses paid for the care of children under what age?

13

True or False: The qualifying person must live with the taxpayer for the entire year?

False, the qualifying person must live with them for more than ½ the year.

Where can you find information in the 4012 about Deductions? What tab does it tell you the standard deductions amount.

Tab F

Knowledge Check cont...

What is the most common big ticket item in which the taxpayer may benefit most from itemizing?

Mortgage Interest

Where can you find the requirements to qualify for the Child Tax Credit in the 4012?

Tab G-8 & 9

Is the Child Tax Credit a refundable or nonrefundable credit?

Nonrefundable, but the client may be eligible for the Additional Child Tax Credit with is refundable.

What should you do for every tax return to ensure the taxpayer receives EITC?

Always check the EIC box on the Main Information sheet when inputting dependent information.