BASIC
WORKSHOP
1
VOLUNTEER INCOME TAX ASSISTANCE (VITA)
TRAINING
11/17/14 REV
ICEBREAKER
Turn to the person to right
Introduce yourself
Tell them one thing you want
to gain out of this volunteer
experience
AGENDA
We will have (2) 15 minute breaks, 45 minute lunch.
We will cover topics:
• CAP Riverside/VITA History
• Volunteer Process
• Standards of Conduct
• Interview/Intake Process
• Exemptions, Standard, or Itemized deductions
• Tax Preparation, inputting income
WHAT IS CAP
RIVERSIDE?
Community Action Agencies signed
into effect 1964 Economic
Opportunity Act by Lyndon B.
Johnson, in an effort to end poverty.
Community Action Partnership of
Riverside County (CAP Riverside)
was founded in 1980.
We perform community needs
assessment to identify agency target
programs, we offer utility assistance,
weatherization, disaster relief,
notaries, free tax preparation,
dispute/conflict resolution, individual
development accounts, and youth
programs.
WHAT IS VITA? EITC?
Found in 1971, by Gary Iskowitz at Cal State
Northridge, Volunteer Income Tax Assistance
(VITA) Program is a free alternative to tax
preparation, which is operated by
volunteers.
Earned Income Tax Credit
(EITC) is a refundable tax credit
for working families. Enacted
in 1975 under the Gerald Ford
Administration.
CAP RIVERSIDE VITA
CAP Riverside has completed 20,000
returns since 2005, last year 162
volunteers completed 3,405 returns,
bringing $4.3 million federal dollars to
taxpayers.
VOLUNTEER
EXPECTATIONS?
Commit to attending workshops to desired certification level
(Basic, Advanced, Site Coordinator)
Training takes place in November, December and January
• Basic requires 2 workshops (plus 1 Software Training)
• Advanced (Returners) requires 2 workshops
• Site Coordinator requires 1 workshop
Minimum hours required is 30 hours at 23 locations
throughout Riverside County, January-April 15
Educate friends and family on the EITC
WHAT DO YOU GET?
FREE Training and first hand
knowledge of the tax code and learn
how to prepare a tax return
Direct impact in the community, you
are 1 of the 1000’s across the country
doing this work
Help bring missed dollars back into
the local economy
CAP Riverside provides certificates,
references, and letters of
recommendation (individuals who
surpass minimum hours)
WHAT KIND OF SUPPORT
WILL YOU HAVE?
FREE workshops
Pub 4012 – Resource Guide
• In-scope chart in Pub 4012
• Do not prepare a return that
you are not certified to prepare,
this will void the coverage
under the Volunteer Protection
Act 1997
Pub. 17 – Reference Manual
Site Coordinator
VITA Hotline 1-800-829-8482
Taxwise Hotline 1-800-411-6391
SITE ROLES
Interview/Intake
• Verifies taxpayer qualifies for VITA services.
Tax preparer
• Processes tax documents provided by taxpayer.
Quality Reviewer
• Assesses prepared return for errors and accuracy.
Exit Interview
• Final process, in which taxpayer receives prepared turn.
Site Coordinator
• Responsible for coordination of site level policies and
procedures.
VOLUNTEER PROCESS
Visit capriverside.org and go to Volunteer Income Tax
Assistance
Complete Training and Certify by January 24th
Complete Live Scan application and schedule appointment
prior to January 24th
Maintain communication, hours, and scheduling
commitments
• To receive Presidential Volunteer Service Award
• Group must complete 200 hours
• Community volunteers must complete 100 hours
CERTIFICATION
Workshops (November-December)
•
Basic Workshops (2)
•
• Software Training (1)
Advanced Workshops (2)
•
Site Coordinator Workshops (1)
Access
www.linklearncertification.com
Create your own account
•
Group: “VITA Volunteer”, “Quality Reviewer”, “Site Coordinator
•
Training Source: “Link & Learn Taxes”
Quick Links: Practice Lab password is “learntwo”
QUESTIONS
STANDARDS OF
CONDUCT
1.
I will follow the Quality Site Requirements (QSR).
a.
2.
3.
4.
5.
6.
Certification, Intake/Interview Process, Quality Review Process, Reference
Materials, Volunteer Agreement, Timely Filing, Title VI “Civil Rights”, Site
Identification Number, EFIN, Security Privacy and Confidentiality
I will not accept payment or solicit donations for federal or state tax
return preparation.
I will not solicit business from taxpayers I assist or use the
knowledge I gained about them (their information) for any direct or
indirect personal benefit for me or any other specific individual.
I will not knowingly prepare false returns.
I will not engage in criminal, infamous, dishonest, notoriously
disgraceful conduct, or any other conduct deemed to have a negative
effect on the VITA/TCE Programs.
I will treat all taxpayers in a professional, courteous, and respectful
manner.
INTERVIEW/INTAKE
TIPS
Screen for eligibility and ensure filing status
•
Out of Scope
•
• Less than $53,00
• Bankruptcy, Foreclosure, Rental Property, Depreciation, K1
Brought required items:
•
Identification:
•
•
•
Income:
•
•
Social Security Card for ALL Persons, ITIN, or Social Security
letter
License
W-2, 1099R, 1099, 1099DIV, W2G, Unemployment, Social
Security
Education Credits:
•
•
Receipts for out-of-pocket K-12 Teach Educational Expenses
Tuition expenses for university/college (Form 1098T)
INTERVIEW/INTAKE
TIPS
Screen for eligibility and ensure filing status
•
Brought required items:
•
Child Credits:
•
•
•
Property Taxes:
•
•
Mortgage Interest Statement, Statement of property taxes,
renter statements (landlord details)
Itemized Deductions:
•
•
•
Provider Name, address, Tax ID, or SSN
Direct deposit information
Charitable donations
Medical Expenses
Additional:
•
•
Previous Year Return
Direct deposit information
REVIEWING INTAKE
SHEET
REVIEWING INTAKE
SHEET
REVIEWING INTAKE
SHEET
COMMON FORMS
COMMON FORMS
INTERVIEW TIPS
Best Practices
•
State your name
•
Make small talk (How are you? How can we help you?)
•
Ask how referred or taxes completed previous years
•
State your qualification (certification)
•
Forewarn of personal questions
• Questions necessary to complete tax return and ensure accuracy
•
Ex: Are you married? Do your dependents reside with you 6 months out of the year?
•
Scan Intake Sheet: Go over in detail and make corrections (RED)
•
Focus on potential disqualifications such as
•
•
•
•
•
•
More than $57,000
Cancellation of Debt
Complex Business
Depreciation
Foreclosure
Rental property
INTERVIEW TIPS
If we are unable to help (out of scope) or
did not bring materials:
•
Explain why we are unable to help
• Keep in mind, to be compassionate and express
regret for the situation.
•
•
•
• Return all papers
Taxpayers may return once they have all
documents (keep spot in line)
Use Due Diligence
Defer to Site Coordinator
EXEMPTIONS
Exemptions allows exclusion of income
from taxation for each on entitled.
•
Exemptions for 2014 is $3,950 each
•
Personal and dependent exemptions
• Cannot claim an exemption for dependent if they
have already been claimed! (Students)
EXEMPTIONS
• Personal and Spousal Exemption
– Dependent children cannot claim a personal
one for their own taxes
• Qualified Child
– Students up to age 24 or disabled
– Relative by blood or marriage
– Must live with you over ½ year
• Qualified Relative
– Real relatives do not have to live with you
– Non-relatives do have to live with you all year
DEPENDENCY TEST
Qualified Child Dependency Test
1. Liz & Todd have 3 children, ages 14, 18 and
20. The eldest is at UCR full time, but lives
at home during the summer and makes
$4k. The middle child just graduated high
school. Which children are dependents?
2. Mary’s daughter is unemployed so she lives
at home. She was a student taking 15 units
for the first 5 months in 2009 and then
dropped out. Can Mary claim Betty as a
dependent?
DEPENDENCY TEST
• Qualified Relative Dependency Test
1. Jude and her son (11) live with her
boyfriend Tim all year. Tim and Jude
have been dating for two (2) years, she
does not have income, can Tim claim the
child as a dependent?
2. Can Jude also be claimed as a
dependent?
3. Jude and her son moved in with Tim on
May 21st, 2013, can Tim claim both?
STANDARD/ITEMIZED
DEDUCTION
• Standard Deduction
• Fixed dollar amount that reduces income that is taxed on.
Standard deduction varies according to filing status.
• Standard deduction increases by $1,550 if you’re blind or age
65 or older.
• Allows deduction if no itemized deductions.
• Itemized Deductions
• Have expenses more than standard deduction cap amounts.
• Type of expenses that qualify are medical/dental expenses, mortgage
interest/real estate taxes, charitable contributions, etc.
FILING STATUS
Filing Status is used to determine filing
requirements, standard deduction, eligibility
for certain credits, and correct tax.
•
Single
•
Head of Household
•
Married Filing Jointly
•
Married Filing Separately
•
Qualifying Widow(er) with Dependent Child
FILING STATUS
Single (on the last day of the year)
– Not married
– Legally separated or divorced, or
– Widowed before first day of tax year, not
remarried within the year
FILING STATUS
Married Filing Jointly
– One return is filed covering both spouses
– On the last day of the year:
• Married and live together
• Live apart but not legally separated or
divorced
• Live together in recognized common law
marriage
• Separated but divorce decree not final
• Widow(er) not remarried during the year
FILING STATUS
Married Filing Separately
• Analysis of living situation is critical:
•
•
•
•
Marital status as of 12/31
Others living in the home and their relationship/dependency
Who paid >50% cost of home upkeep
If widow(er): date of death of spouse and if there are any
dependents
• Some credits unavailable, some reduced
FILING STATUS
Head of Household
• A taxpayer may qualify if he or she:
• Is unmarried or “considered unmarried” on last day of tax year,
and
• Paid >50% cost of keeping up a home for the tax year, and
• Had a qualifying person living with them more than half the
year (except for temporary absences)
FILING STATUS
Important questions:
– Who lives in house/apartment?
– Months/years in each home?
– Dependent relationship(s)?
– Marital status as of December 31?
FILING STATUS
• Filing Status Exercises:
1. George lives at home with his parents. He
makes $20k a year. What status can he claim?
2. Tyler and Carrie have been married for 10 years
and became divorced on December 29th, 2014,
what status can they claim?
FILING STATUS
• Filing Status Exercises:
1. Mark and Larry are domestic partners. They are
married and have been living together for three
(3) years, what status can they claim in CA?
2. Pedro is not married. He sends $10k a year to
support his parents in Mexico. Pedro got them
ITIN numbers from the IRS two years ago and
claims them as dependent relatives. What
status can Pedro use?
FILING STATUS
• Filing Status Exercises:
1. Betty’s husband left her 3 years ago and hasn’t been
heard of since. She has yet to divorce. She
supports their 2 children, ages 8 and 5 in a home
she rents. Her parents help with money for clothes
and medical insurance for the children. What status
can she claim?
2. Pedro is not married. He sends $10k a year to
support his parents in Mexico. Pedro got them ITIN
numbers from the IRS two years ago and claims
them as dependent relatives. What status can
Pedro use?
QUESTIONS
LOGGING INTO
PRACTICE LAB
www.linklearncertification.com
Practice Lab
• Password = learntwo
• Create Username & Password and
store on your 4012.
LOGGING INTO
TAXWISE ONLINE
• TWOnline
• Need these items to login: Site Client Number, Username,
and Password.
TAX PREPARATION
TIPS
Beginning Tips:
•
Inputting SSN CAREFULLY
•
Go To Tax Forms
•
• (DO NOT USE INTERVIEW)
Main Information Screen
•
• (ALL CAPITALS)
Inputting information where it is RED
•
TSJ stands for Taxpayer, Spouse, or Joint
•
No punctuation
•
Don’t forget E-MAILS!
•
Biggest mistake seen on “Name Line 2. Use % for care of” (SKIP
IT or Put Caretakers Name)
TAX PREPARATION
• Input same SSN twice, brings you to Main Info. Screen
• Fill out address, phone numbers and birthdates
TAX PREPARATION
Entering Dependents
•
Who may be claimed
as a dependent?
•
•
Qualifying child
Qualifying relative
List from
youngest
to oldest
TAX PREPARATION
Direct Deposit:
Have customer verify
numbers and make
sure information is
correct!
TAX PREPARATION
Finishing Main Information:
• Input accurate date
• Have taxpayer select their
pin
• If taxpayer has Identify
Protection Pin, please enter
in the field or return will be
rejected
• Ensure Preparer
Information has been
properly inputted
UNDERSTANDING
1040
After completing
the Main Information
Page
Go to the Loaded
Forms Tree,
& Click 1040 Pg 1
to begin inputting
Wages, salaries, tips
Etc. on Line 7
UNDERSTANDING
1040
Navigating the 1040
• The information on this portion of 1040 Page 1 will be
transferred from the main information page. Remember to
return to the 1040 if you become lost in tax preparation.
UNDERSTANDING
1040
Right click here to add additional dependents.
The “Income”
Section has a
corresponding
blank field to
each line item.
Depending on
type of income,
you will need to
highlight the
blank field to pull
up the required
form.
UNDERSTANDING
1040
The “Adjusted Gross Income” section covers areas which will
operate as a “credit” for taxpayers, reducing their income.
• Line items to pay close attention to are Educator Expenses, Alimony
Paid and if taxpayer wishes to take the student loan interest deduction.
• Deductible part of self-employment tax is automatically filled in when
filling out a Schedule C.
UNDERSTANDING
1040
The second page of 1040 covers Tax and Credits, Other
Taxes, and Refund amount.
UNDERSTANDING
1040
Other taxes shows type of taxes due, while Payments shows
what has been paid towards taxes due.
TAX PREPARATION
Following The Boxes (Linking to Form):
Click the “0” field and small grey arrow
Click the document with the link
TAX PREPARATION
Follow arrows,
input W-2 into
Taxwise as is
shown on W-2
Wage Statement
TAX PREPARATION
Finishing the W-2 Form:
• Box 14 on W-2, place SDI on
Line 15, but put DD on Line 12
• Place State information on Line
15 as highlighted
QUESTIONS
TAX PREPARATION
Follow the boxes to
input interest and
dividends income
This only applies
to families that took
the itemized deduction
AND
Received a state or
local tax refund
If neither or not one of
the two, the answer is
NO.
TAX PREPARATION
Schedule B is where
preparers list interest
income and dividends, by
linking to the form.
List income interest in
“Other Interest”
AND
Dividends in “Part II:
Ordinary Dividends”.
TAX PREPARATION
T
TAX PREPARATION
T
TAX PREPARATION
Inputting unemployment
Inputting Social
Security benefits
TAX PREPARATION
NEXT TRAINING
We will cover remaining basic concepts:
• Schedule A (Itemizations)
• Alimony
• Dependent Care Expenses
• Student Loan interest deduction
• American Opportunity/Lifetime Learning Credit
• Earned Income Tax Credit
• Child Tax Credit
QUESTIONS