tax-aide instructor workshop what’s new in 2013 highlights janelle riedl – az trs az instructor...

TAX-AIDE

TAX-AIDE

AZ Instructor Workshop TY13 1

Instructor Workshop What’s New in 2013Highlights

Janelle Riedl – AZ TRS

TAX-AIDEAZ Instructor Workshop TY13 2

Agenda

● Volunteer Certification Changes

● New Plastic Project

● Training Products

● Tax Law Changes

● AARP Scope Changes

● TaxWise Changes

● Arizona Changes

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Volunteer Certification Changes

Source: IRS Fact Sheet


New This Year for All Volunteers

● Volunteer Standards of Conduct (VSC) – Ethics — Pub 4961 will include training and certification on the Intake/ Interview and Quality Review Processes Approximately 10 questions


Changes to Counselor Certification Test

● Test reduced from three (Basic, Intermediate and Advanced) to two independent tests (Basic OR Advanced) AARP Tax-Aide will certify to Advanced Approximately 40 questions

● HSA and COD remain as independent certification


Required Training

● Client Facilitators Client Facilitator Training

● Counselors Interview & Intake Quality Review Volunteer Policies and Procedures

● Local Coordinator Policies and Procedures

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Form 13615, Page 1


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Form 13615, Page 2



Form 13615, Page 2

Request for CE credits to be sent to National Office for Approval.Do NOT send to SPEC.

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QUESTIONS/COMMENTS?


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New Plastic Project

Sent to all volunteers


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QUESTIONS/COMMENTS?


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Training Products

Source: IRS Fact Sheet 8/13


Available IRS Training Products

● Pub 4480 VITA/TCE Link & Learn Training Kit Pub 4012, Volunteer Resource Guide Pub 4491W, Problems and Exercises

(Evergreen) Pub 5051 (CD) Form 6744, Test/Retest


Pub 5051 CD

● Pubs 4012, 4491-W, 4491, Form 6744

● Pub 4942, HSA, COD Test

● Pub 4961, Volunteer Standards of Conduct – Ethics Training

● Pub 4965(PR) Puerto Rico Volunteer Test

● Pub 4704-FS, Foreign Student Test

● Form 13614-C EN & SP Intake/Interview and Quality Review Sheet


Evergreen Products

● Pub 4491 Training Guide and Pub 4491W Problems and Exercises

● Evergreen products require minimal updates and will be updated every 2–3 yrs

● NOTE: Evergreen products should be maintained at the end of the filing season and used again the next filing season

● Pub 4491-X will contain updates to Pub 4491 and Pub 4491W

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QUESTIONS/COMMENTS?


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Federal Tax Law Changes 2013

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Federal Tax Law Changes 2013

● New provisions

● Indexing

● Extenders

● Form change

● Due Dates


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Medical Deduction Haircut

● Taxpayers can deduct amount of unreimbursed medical and dental expenses that exceeds 10% of AGI (was 7.5%)

● If 65 or older, threshold remains 7.5%


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Capital Gains Tax Rate

● New 20% rate for higher income taxpayers


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New Taxes

● Medicare tax on high incomes

● Net investment income tax for high income taxpayers

● Both apply if AGI exceeds $200,000 Single or HH $250,000 MFJ or QW $125,000 MFS

● Both out of scopeAZ Instructor Workshop TY13 26

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Social Security Tax Rate

● Employee portion of social security tax returns to 6.2% (was 4.2% for 2011–2012) Applies to self-employment tax too

Full social security rate now 12.4%Total S-E tax rate 15.3%


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Standard Deduction and Exemption Increases

● $6,100 – Single or MFS $7,600 – Single >65 or blind

● $8,950 – HH $10,150 – HH >65 or blind

● $12,200 – MFJ or QW $13,400 – MFJ, QW >65 or blind

● Exemptions increase to $3,900AZ Instructor Workshop TY13 28

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Standard Mileage Rates 2013

● 56.5¢ per mile – business miles

● 24¢ per mile – medical miles

● 14¢ per mile – charitable miles


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EIC Maximum Credits and Income

● $6,044 – three or more qualifying children

● $5,372 – two qualifying children

● $3,250 – one qualifying child

● $487 – no qualifying child

● $46,227 ($51,567 MFJ) 3 qualifying children

● $43,038 ($48,378 MFJ) 2 qualifying children

● $37,870 ($43,210 MFJ) 1 qualifying child

● $14,340 ($19,680 MFJ) no qualifying child

Max

Cre

dit

Max

Inco

me



Earned Income Credit

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Deductible Long-Term Care Premium Limits

● Qualified long-term care premiums includible as medical expense on Sch A $360 – Age 40 or under $680 – Age 41 to 50 $1,360 – Age 51 to 60 $3,640 – Age 61 to 70 $4,550 – Age 71 and over


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Other Indexing

● HSA Limits $3,250 self-only coverage $6,500 family coverage Both + $1,000 if age 55 or older

● Retirement savings credit income limits Max $29,500, $59,000 MFJ, $44,250 HH

● Max investment income for EIC $3,300AZ Instructor Workshop TY13 33

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Other Indexing

● IRA contributions Max $5,500 ($6,500 if age 50 or older) Modified AGI limits when covered by

employer plan

● Lifetime learning credit income limits

● Excludible savings bond interest – out of scope

● Foreign earned income exclusionAZ Instructor Workshop TY13 34

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Extended Provisions 2013

● Tax-free distribution from IRAs to public charities for individuals age 70½ or older

● COD exclusion for principal residence

● Adjustment for educator classroom expenses up to $250

● Adjustment for qualified tuition and fees


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Extended Provisions

● Premiums for mortgage insurance deductible as interest for qualified residence

● Deduction for state and local general sales taxes

● Nonbusiness energy property credit


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Form Changes

● Sch D new lines if all transactions on statement are Code A or D – basis reported to IRS with no adjustments

● Continue to enter all capital gains/losses on Capital Gains Worksheet in TaxWise TaxWise will carry to proper forms/lines


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Due Dates

● 2013 tax returns are due Tuesday, April 15, 2014

● 2014 estimated payments due April 15, 2014 June 15, 2014 September 15, 2014 January 15, 2015



Form 8453

● Where Form 8453 is required Can be scanned and sent with return or Copy must sent to Austin AND to the

local SPEC office. Prepaid mail label are suppose to be provided


Defense of Marriage Act (DOMA)

● AARP Tax-Aide will be required to prepare MFJ Federal tax returns for same sex married couples married in a state that recognizes same sex marriage.

● Separate AZ paper returns will be required for each taxpayer along with AZ Sch S.

● Further discussion in AZ Tax Law


Identity Theft

● If unable to file return electronically because primary/secondary SSN was misused, attach Form 14039 to paper return and submit to IRS


Notice CP01A

● IRS sent Notice CP01A to over 600,000 taxpayers last year

● CP01A contains Identity Protection PIN for use on current year return

● Enter IP PIN on Main Info Sheet in field located below where TP PINS entered


Enter IP PIN on Main Info Sheet

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QUESTIONS/COMMENTS?


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AARP Tax-Aide Scope Changes


AARP Tax-Aide Scope Changes

● SPEC has approved the following requested scope changes Sch C Expenses limit to $10,000 Wash Sales (Schedule D) reported on

1099-B or equivalent SEP/Simple IRA Distribution


Other AARP Tax-Aide Changes

● We should try to enter bank information only from a check. If the taxpayer insists on using information they have, we can enter the bank information but the taxpayer must initial the return bank information and the counselor must enter the source of the information on the return.

● Name tags should include volunteer first name AND last initial only

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QUESTIONS/COMMENTS?


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TaxWise®

Tax Year 2013 Changes


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2013 Software Initiatives –TWO onlyTax Year 2013 Changes

● Additional dependent statement linked from main information screen instead of from Form 1040 pg 1

● Standalone Mortgage Interest Worksheet linked to Schedule A


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2013 Software Initiatives –TWO onlyTax Year 2013 Changes

● Added capability to include print sets in template publisher send settings (TWO)

● Added ability to search by dependent’s last name – TWD and TWO

● The latest news added to homepage


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2013 Software Initiatives –TWD onlyTax Year 2013 Changes

● Reminder: e-filing available for current and prior two tax years (2013, 2012 and 2011)

● Clear sent e-files – TWO and TWD Allows ERO to cancels e-file in limbo

between tax site and MeF and then create and submit new e-file

● Cannot e-file amended returns – MeF cannot accept them


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CCH Small Firm ServicesTaxWise Updates


Questions?

Comments…

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Changes to Arizona Tax Law - 2013


Standard Deduction Indexed for Inflation - 2013

● Single or married filing separate - $4,945

● MFJ or HH - $9,883


Subtraction for Net Long-Term Capital Gains

● Beginning in 2013, you may take a subtraction from AZ gross income for a percentage of any net long-term capital gain included in AGI derived from assets acquired after 12/31/11


Subtraction for Long-Term Care Insurance Premiums

● Beginning in 2013, you may subtract the amount of qualifying premium costs for long-term care insurance as long as you are not claiming itemized deductions.


Subtraction for AZ Long-Term Health Care Savings Accounts

● Beginning in 2013, you may subtract amounts you paid into long-term health care savings account established under AZ law


Subtraction for 529 College Savings Plans Increases for 2013

● Single or HH - $2,000

● MFJ - $4,000


Credit for Contributions to Charities that Provide Assistance to the Working Poor

● Beginning in 2013, you are no longer required to itemize deductions in order to claim a credit for contribution make to a qualifying charitable organization

● Total maximum credit $400 for single taxpayers and $800 for married taxpayers

● See AZ Form 321 for more information


Credit for Contribution to Private School Tuition

● For 2013, the amount of the allowable credit for contributions to private school tuition organizations adjusted for inflation.

● Single/HH - $517 maximum

● MFJ - $1,034 maximum



Credit for Contributions Made to Certified School Tuition

● For 2013, amount of allowable credit for contributions to certified school tuition organizations adjusted for inflation

● Single/HH - $514

● MFJ - $1,028



Some Taxpayers Receiving Balance Due Notices from AZ● In 2009 Federal law allowed the first $2,400 of

unemployment compensation to be tax free

● AZ decided in May 2010 to not conform to Federal law; therefore, unless taxpayers with unemployment filed an amended return, they owe AZ tax

● AZ is sending out notices to taxpayers affected by decision

● No action is required by AARP Tax-Aide. Taxpayer just has to pay amount due.


2013 AZ Income Tax Tables


Defense Of Marriage Act - AZ

● AZ does not recognize same sex marriages and therefore we cannot prepare a MFJ AZ return.

● AARP does have to prepare a MFJ Federal return for a same sex marriage couple

● AZ Action for same sex marriage couple Prepare a single Federal return for each taxpayer,

complete AZ return, decouple and paper file as state only and include AZ Sch S for both taxpayers.

Prepare a joint Federal return without AZ and efile


2009 Unemployment

● In May 2010, after tax season, AZ decided not to recognize the Federal first $2400 in unemployment compensation as tax free

● Taxpayers affected by this are now receiving tax bills from AZ.

● No action required on our part. Just explain to taxpayers and indicate that they should pay.

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QUESTIONS/COMMENTS?


tax-aide instructor workshop what’s new in 2013 highlights janelle riedl – az trs az instructor...

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