Final 11-15-2008 NJ Training TY 2008 1

Quality Review IsMandatory

What?Why?How?Who?

Module NJ 1.32

Quality Review Summary

A MUST for ALL tax returns including PTRs NO EXCEPTIONS

Need 3 or more counselors at each site Requires verification

Filing status and eligibility as a dependent Input data from all source documents Key information is not overlooked

Compare with prior year return (if available) QR must be by a 2nd Certified counselor For paper returns, effectively re-do the return

Significant Issues and Problems Strict adherence to “NJ Can Do/Cannot Do List” Proper handling of tax exempt interest and dividends Failure to include taxable NJ Property Tax Refunds (Homestead

Rebate and PTR) on Federal Return Accurate completion of Schedule C-EZ, Business Income Accurate completion of questions on EIC Worksheet Failure to complete of NJ IRA Worksheet(s) to ensure inclusion of all

IRA Distributions in NJ1040 Reporting rent and/or property tax on

NJ Property Tax deduction or credit worksheet and/or NJ1040 Rebate application for tenants

Accurate preparation of NJ and NY Returns for NJ Residents with NY W-2s Carry forward of proper amounts of Taxable NY Income & NY Tax Liability

to the appropriate NJ form

Final 11-15-2008 NJ Training TY 2008 4

Common Errors

Incorrect data entry of : Names Addresses DOB SSN

Filing status and dependency determination Entry errors from W-2 and/or 1099 information

Either in income & tax withholdings Missing or incorrect EIN and Payer ID

Improper completion of EIC Worksheet Improper entry of RRB-1099R Entry of 1099-OID as tax exempt

TOP TEN PROBLEMSUSING TAXWISE

1. Improper OVERRIDES!2. Improper use of punctuation3. Incorrect entry of last name –

spouse/dependents4. Not linking to 1099MISC from Sch C-EZ5. Use of scratch pad when existing worksheet

or schedule

TOP TEN PROBLEMSUSING TAXWISE

6. Adding new form when already existing form7. Not recreating e-file as last item before exiting

return – thus creating an invalid e-file8. No or incorrect state adjustment for interest and

dividends9. Improper completion of Sch EIC worksheet10. Zero cost basis for capital gains11. Failure to input medical expense and real estate

taxes on Federal Schedule A (Need for NJ return)

Final 11-15-2008 NJ Training TY 2008 7

1st Steps In QR Process

Run Diagnostics e-file errors Identify overrides – Why/Impact On Return

Review Forms Tree Any RED exclamation points(!!!) If so, determine if there is any significant

missing data and/or potential impact on accuracy of return

Final 11-15-2008 NJ Training TY 2008 8

Taxpayer Information Verification

Name: taxpayer, spouse and dependents

Address

SSN

Date of Birth Must Match IRS Master File

Final 11-15-2008 NJ Training TY 2008 9

Source Documents Compare all source documents with data input

This can be done different ways Review of data on monitor Use print out of input documents

Review completed return

Manual Returns – Add total income and withholdings on W-2s, 1099s and compare to tax return

Final 11-15-2008 NJ Training TY 2008 10

Paper Returns In effect, redo the return! Check all footings and calculations Calculations on Schedules & Worksheets if

applicable Schedule D Capital Gains and Losses Simplified Method for determining taxable pension

amount Social Security Worksheet for determining amount

taxable Tax Liability check amount to

Tax table, or Qualified Dividend and Capital Gain Tax Worksheet

Tax Credit forms

Final 11-15-2008 NJ Training TY 2008 11

Who?

Quality Review requires a “second set of eyes.” It cannot be done by the counselor who prepared the return Must be a certified counselor The taxpayer CAN NOT be the “second set of

eyes”

Final 11-15-2008 NJ Training TY 2008 12

How? Locations with several tax preparers (Larger Sites)

One person is designated to do QR Same person may also be responsible for helping TP

prepare Intake Sheet Can rotate this position periodically

Locations with fewer tax preparers (Smaller Sites) Designate one person to do QR, if practical, rotate

periodicallyOR

Preparers exchange returns with other preparers Requires at least 2 preparers at every site & for

Shut-In Returns