EKS TrainingNovember 22, December 6 and 13th

Scenario #3

In this scenario, you will learn about:

Returns with ITINS Itemized Deductions Affordable Care Act

Scenario #3

When you’re finished, you will know how to:

Build on their skills from previous lessons Login into TW and start a return Identify filing status and dependents Input income documents

Identify and input itemized deductions

Prepare a return with an ITIN

Intake & Interview

BUILDING ON WHAT YOU’VE ALREADY LEARNED:

1. As a volunteer you must review form and verify if their answers correspond with documents presented

2. Verify if form is filled out correctly and corrections are made when clarifying questions are asked

3. Determine if the client is eligible for VITA services- see Scope of Service chart in Publication 4012, Pages 8 and 9

Starting the Tax Return – Pub 4012, Tab N

It’s time to start the tax return!

Individual Taxpayer Identification Number (ITIN) Pub 4012, Tab L

THINGS YOU NEED TO KNOW ABOUT ITIN’S:

1. IRS issues ITINs to individuals who do not have a Social Security Number but who need to file taxes - undocumented immigrants and others

2. An ITIN: Is formatted like the SSN and contains nine digits Starts with a number 9 Note that someone with an ITIN might have a mismatched

SSN on the W-2. In this case, use the ITIN on the main information sheet, but use the SSN that appears on the W-2 when inputting information onto TaxWise

ITIN documentation comes either as a letter or a card, similar to a SSN card

Individual Taxpayer Identification Number (ITIN) Pub 4012, Tab L

THINGS YOU NEED TO KNOW ABOUT ITIN’S Cont…:

4. ITIN filers are not eligible for the EITC

5. If the client needs and ITIN, refer the client prior to preparing their taxes to a Certifying Acceptance Agent VITA Site. There are many CAA sites throughout our 7 counties. Taxpayer applies for an ITIN by completing IRS form W-7 and attaching a tax return. If you are volunteering at a CAA Site, talk to your site coordinator for appropriate protocol.

Itemized Deductions - Pub 4012, Tab D

THREE THINGS YOU NEED TO KNOW ABOUT EXEMPTIONS:

1. Schedule A must be prepared when itemizing deductions

2. Taxpayers can benefit from itemizing if they have mortgage interest or high unreimbursed medical expenses- those are two questions to ask the taxpayer before preparing a Schedule A worksheet. If unsure whether to itemize or take the standard deduction, use Publication 4012, Tab F-3 interview

3. Itemized deductions include:

4. Medical and Dental expenses- Only deduct amount that is more than 10 % of their AGI (7.5% for taxpayers 65 or older) and must be paid by the taxpayer. They cannot be reimbursed

Certain taxes you paid Mortgage Interest- 1098 Gifts to Charity Miscellaneous Deductions

Online Resource: For more information on deductible and non-deductible expenses visit: http://www.irs.gov/pub/irs-pdf/p17.pdf CHAPTER 21

Affordable Care Act Pub 4012, Tab D

Brandon is not eligible for coverage because he is undocumented. He qualifies for a healthcare coverage exemption that will be claimed on Form 8965. See Pub 4012, ACA Tab 2

Reviewing and completing the return

1. Complete the CA return

2. Review the federal return Bank account information needed for direct deposit-

refer to Part VII of the Intake Sheet Identity Protection PIN- if client checked the “yes” in

box 12 of the Intake Sheet, refer to Pub. 4012, Tab P-1

3. Finish the return Do the Rodgers want to split their refund?

Knowledge Check!

If your client is itemizing their deductions, which Schedule do you complete in TaxWise?

Schedule A

What are two items does a client usually have to indicate that they may itemize?

Mortgage interest from owning a home and really high unreimbursed medical bills

True or False: Filers with an ITIN are eligible to receive the Earned Income Tax Credit?

False