1 District 5 LC Meeting 2012 What’s New in 2012 Highlights – Dist 5 Bob Eslinger Pacific Region Training Advisor

1District 5 LC Meeting 2012

What’s New in 2012Highlights – Dist 5

Bob EslingerPacific Region Training Advisor

2District 5 LC Meeting 2012

WHAT'S NEW IN 2012Highlights

Training Approach 2012 Potential Changes TWO Changes TIGTA/IRS/SPEC Review Program Scope ShareNet/AZ Tax Certification

3AZ Instructor Workshop 2012

TRAINING APPROACH

Train to 2011 Tax Law using 2011 Tax Software

Transfer to 2012 once tax law is defined and software is available

Certification same as last year


TRAINING MATERIAL

Kit 1 - Pub 4480 Kit – Includes 2011 Pub 4491W workbook plus Pub 5051 CD with all 2011 training products; and Form 6744 test.

Form 6744 test is complete and is being shipped with Pub 4480 kit. Can also be ordered separately; Available on L&L

Pub 4491 (2011) available printed or electronically Pub 3189 (e-file Administrator Guide) and 2012 Pub

17 ordered separately Orders placed by 11/1/12 shipped around 11/19 Orders placed 11/2 – 11/8 shipped 11/26


TRAINING PACKETS, cont’d

Kit 2 - Once 2012 tax forms and tax law updates are determined, Pub 4012 Kit will be released: Pub 4012, “Volunteer Resource Guide”

and Pub 4491-X, VITA/TCE Training Supplement along with CD containing 2012 tax forms and instructions


TRAINING PACKETS, cont’d

Link & Learn Training has been redeveloped More people use online for tax law training

and learning TaxWise IRS - SPEC's ultimate goal is to have all

partners transitioned to e-learning products and training by 2014

NTTC has increased use of self-study and on-line learning tools


2012 Changes

2012 Standard Deduction: Single/MFS = $5,950 ($150 increase) HOH = $8,700 ($200 increase) MFJ/QW = $11,900 ($300 increase)

Additional standard deduction for people 65/older or blind remains same $1,150 for married individuals filing jointly or separately

and qualifying widow(er)s and $1,450 for singles/HOH

Personal exemption increase of $100 to $3,800.


2012 Changes (cont’d)

FICA Tax - Extension of temporary decrease in employee’s share of payroll tax 4.2% social security tax on first $110,100 wages Self-employed tax rate of 10.4% up to the social

security wage limit of $110,100 wages

Social Security & Medicare wage threshold for household employees = $1,800 ($100 increase)


Expired Provisions(beginning after December 31, 2011)

IRA Distributions for Charitable Purposes Educator Expense Adjustment - not in

excess of $250 Tuition/Related Expenses - for qualified

tuition and related expenses, ranging from $2,000 to $4,000

Mortgage Insur Premium Deduction State/local general sales taxes Deduction


Expired Provisions(beginning after December 31, 2011)

AMT Exemption Amount - alternative minimum tax (AMT) exemption amount for individuals is scheduled to drop significantly It will decrease from 2011 levels of $74,450 for joint

filers and surviving spouses and $48,450 for single individuals other than surviving spouses

To $45,000 and $33,750, respectively, in 2012

Nonbusiness Energy Credit


Standard Mileage Rate

55.5 cents per mile for business

23 cents per mile for medical or move-related mileage

14 cents per mile for charitable purpose


Earned Income Tax

Qual Child Income(Single) Income (MFJ) Max 3 45K 50K $5891

2 41K 47K $5231

1 37K 42K $3169

0 14K 19K $475

Must have <$3200 investment income



Tax Form Changes

Schedule C-EZ exists for one more year, but not recommendedUse Sch C but must not exceed Sch C-EZ

limitations, including business expense up to $5,000

Form W-2 – Cost of employer-sponsored health coverage reported in box 12 using code DD. NOT TAXABLE


Sch C Limitations


Tax Forms

Form 8863- Education Credits Parts II and IV are moved to page 1 and renumbered

as Parts I and II Old Part I became Part III on page 2 Part III is for information regarding the student, the

student’s eligibility for a credit and the educational institution(s) information

Additional page 2 information required for each student


Form 8863 – Page 2



Form 8863 – Page 1


New TWO Form (Wkt7)

1040 Line 21 Other Income

New Worksheet for reporting Miscellaneous Income

Includes 16 additional income lines

New diagnostics will be added Income from another form

auto-populates the worksheet with amount and type

1099-Misc income link to worksheet then to

1099M.

April 21, 2023 - USA

20



SCH D & FORMS 8949

New 2012 - Form 8949 has been changed – which requires separate columns along with description of the sale Stock Symbol Number of Shares Code for adjustment is next to amount

TaxWise will create appropriate 8949s based on entry in the Capital Gain or Loss Transactions Worksheet (Cap Gain Wkt)

Schedule D has new reporting lines for use in Forms 8949


Beginning in 2011, brokers must report cost or other basis on Form 1099-B, unless securities sold were noncovered* securities

Beginning in 2011, brokers must report whether a gain or loss is short-term or long-term on Form 1099-B, unless the securities sold were noncovered* securities

NEW BROKER REQUIREMENTS


NONCOVERED SECURITIES

A security other than stock Stock purchased before 2011 Stock acquired before 2012 in a

regulated investment company for which the average basis method is available

Stock acquired before 2012 in connection with a dividend reinvestment plan



2012 Capital Gains Worksheet




What’s New for 2012-13 TWO

No More Legacy processing all Modernized eFile (MeF)

“Linked” State Returns will be held until Federal Return is accepted. No more State Reject 901 and 902



TaxWise 2012 - TWO TWO Training Templates can be “Published” to Production version

Create Template from Master Template in Training, then “Publish” to Production

TaxWise Online Training and Practice Lab Time out increased to 60 minutes



Preparer Use Form Option to carry forward Carries forward both questions and answers

Taxpayer Reminders Enter information they want to see the

following year New option in Carryforward >Prior Year Data

to import from 2011 to 2012 Preparer has option to show each time return

is opened Setup Options>General Tab


31



Print Reject Details View and print from inside TaxWise Online Allows easier access to see and resolve rejects

Add Client telephone number in Client letters


The diary will automatically record the user you are logged in as, the day, date and time.

TaxWise 2012 - TWO


33

A new button on the toolbar to create Taxpayer Diary

A new icon will appear in the Existing return list to the left of the TIN



TaxWise 2012 - TWOTWO Contingency (Off-line) Option

Uses Desktop that updates to TWO when back on-line TWO system outages Internet outages at site Provides roving capability at temporary locations with no internet capability.


TIGTA/IRS/Spec Review

TIGTA: 39 sites reviewed 49% were accurate

IRS/Spec: 92% accuracy rate (87% last year)

Keys: QR by second person Tax preparers certified annually to Advanced

Continued Emphasis: Mandatory use of Intake/Interview and Quality Review Sheet

during all taxpayer interviews Due Diligence


DUE DILIGENCE

WHAT IS DUE DILIGENCE?Asking sufficient and thorough questions to ensure the accuracy and completeness of the tax return ANDVerifying the accuracy of documents/receipts presented OR determining when to rely in good faith and without verification on the customer’s oral testimony ANDEnsuring a second person quality review.


DUE DILIGENCE (continued)

Counselor must ask questions if the information furnished appears to be incorrect, inconsistent, or incomplete

Volunteer may not ignore information furnished to, or actually known by, the preparer

Counselors must not KNOWINGLY prepare false returns! Remind taxpayers that when they sign their

return, they are stating that the return is accurate to the best of their knowledge and they are responsible for the return


Intake Sheet Changes

Section A Picture ID (such as valid drivers license or

other government issued ID) Part III Income questions added

7. Self Employment Income 8. Cash/check payments for any work

performed not reported on Form W-2 Section C Certified Volunteer QR Section

No boxes, emphasis placed on reviewing information on pages 1 & 2




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


QSR#10: Security Privacy and Confidentiality

More critical than ever to ask taxpayers for proof of identity and social security numbers

Individuals who are victims can report the incident to the Identity Protection Specialized Unit (IPSU) at 1-800-908-4490.

If it is determined the taxpayer is a victim of identity theft, the unit will place an Identity Theft indicator on the taxpayer’s account.


Enter Pin In TW


SCOPE

Poster C2467 – What AARP Foundation Tax-Aide can and can’t do for you today (Next 4 slides)

Training Guide Appendix H – Scope Topics Seven pages of In Scope/Out of

Scope discussion by Form/Schedule


$5,000



NOTE: COD IS OUT OF SCOPE FOR ARIZONA


$5,000


Training Guide – Appendix H

Appendix H can be found on the ShareNet [Training][Site and Volunteers][Appendix H

Scope Topics] or [AZ Tax] [Training]

Provides detailed scope by form/schedule, by line number

Includes any limitations for that particular form or schedule line number


Training Guide Appendix H


Other Training

District must decide approach to train ERO’s.

Reference ERO Presentation on ShareNet or AZ Tax

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 ShareNet or AZ Tax


https://volunteers.aarp.org



http://www.aztax-aide.org/


AZ Tax Site

http://www.aztax-aide.org/Should be the first place to look for

informationhttp://www.aztax-aide.org/Pages/NewMemLi

nks.htmlBypasses entry page and goes directly to

counselor information page or Click on cactus


http://www.aztax-aide.org/Pages/NewMemLinks.html


Certification Requirements

All volunteers must attend presentation on Standards of Conduct, pass the standard of conduct test (80%) and sign Form 13615 Standards of Conduct Agreement

All counselors must attend training & pass basic, intermediate and advanced test (80%) and prepare 4 exercises assigned by instructor


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


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 doesn’t have to

grade test See document [Take the Test Using Link &

Learn (11/14)


Counselor Certification Continued

Lead instructor should collect Form 13615 and inform LC of certified counselors and other counselors who have passed the Standards of Conduct (CF/TC).

All Form 13615s must be signed by instructor & a copy submitted to Sandy Liska either by mail, fax or email. For new counselor she will also need the supervisor name.

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

The list of AZ certified counselors will be available online.


Summary

Starting off to be a crazy year Potential Congressional changes impacting

program Initial training and testing to 2011 training

material 2 basic changes, Capital Gain Worksheet and

Form 8863 Education Credits Emphasis on staying in scope, and Due

Diligence Schedule C limited to $5,000 expenses


QUESTIONS???

Documents

1 District 5 LC Meeting 2012 What’s New in 2012 Highlights – Dist 5 Bob Eslinger Pacific Region Training Advisor