Filing Basics

Pub 4012 Tabs A, 1, 14Pub 17 Intro, Chapter 1

LEVEL 2 TOPIC

4491-03 Filing Basics v1.0 VO.ppt

11/30/2010 1NJ Training TY2010 v1.0

Need To Know

Filing status, age & marital situation Is taxpayer a dependent? Blind? All sources of income Excluded or exempt income Whether TP received advanced Earned

Income Credit (EIC)? Any withholding or estimated taxes paid Any carry-forward capital losses

11/30/2010 2NJ Training TY2010 v1.0

Where To Get T/P Info

Intake Sheet

Tax Documents

Prior Year Return

11/30/2010 3NJ Training TY2010 v1.0

Principal Sources Of Income

Salaries/Wages

Interest and Dividends

Sale of Securities-1099B

Pensions/IRA Distributions

Social Security Benefits11/30/2010 4NJ Training TY2010 v1.0

Filing Requirements(See Pub 4012 Tab A)

Pub 4012: Page A-1

11/30/2010 5NJ Training TY2010 v1.0

Filing Requirements(See Pub 4012 Tab A)

11/30/2010 6NJ Training TY2010 v1.0

Pub 4012, Tab AChart A - Footnotes If TP turns 65 on Jan 1 of next year considered 65

for prior year When using chart, do NOT include social security

benefits unless: You are married filing a separate return and you lived

with your spouse at any time during the year, or One-half of your social security benefits plus you other

gross income is more than $25,000 ($32,000 if MFJ) MFJ not living with spouse at end of year and had

gross income of $3,650 or more, must file regardless of age

11/30/2010 7NJ Training TY2010 v1.0

Also Must File If

Over $400 of net self employment income

Received advance EIC – from W2 box 9

Owe special taxes (unreported tips, household employment, etc)

11/30/2010 8NJ Training TY2010 v1.0

Children & Other Dependents

Pub 4012: Page A-2 Must File

Single dependents under 65 withunearned income over $950 and/orearned income over $5,700

Married dependents - 65 or older or blind See Pub 4012 Tab A

11/30/2010 9NJ Training TY2010 v1.0

Who Should File

Pub 4012: Page A-3

Claiming refund of withheld taxes or estimated taxes paid

Claiming earned income credit Claiming additional child tax credit If TP received 1099B, Sale of Capital Assets

11/30/2010 10NJ Training TY2010 v1.0

When Not To File NJ

Not a resident (for tax purposes) of New Jersey Adjust State Return box on Main Info screen

Do not file NJ 1040 return if ALL of the following conditions exist:

Homeowner (not a Tenant) Income below filing threshold No withholdings to be refunded Not eligible for Earned Income Credit (EIC)

Click NO on box “Do You Want To Electronically File This Return”, page 3 of NJ return

11/30/2010 11NJ Training TY2010 v1.0

MUST/SHOULD FILE QUIZ #1

Miranda, 17, claimed on her parents’ return W-2 shows $2000 in wages and federal tax

withheld of $155 Grandparents gave her a $3000 CD as a gift She has no other income Must or should Miranda file?

Should: to get back her withholding CD is a gift – not counted in income

11/30/2010 12NJ Training TY2010 v1.0

MUST/SHOULD FILE QUIZ #2

Kathy, 22, attends college full time Earned $850 babysitting and had $3000

reported on a W-2; no tax was withheld.

Must or should Kathy file?

Must: had >$400 in self-employment. If only W-2, would not have needed to file.

11/30/2010 13NJ Training TY2010 v1.0