Filing Basics Pub 4012 Tab A, B, D Pub 4491 Part 1

Need to Know… Age Gross Income and Social Security received Intake Sheet Confirm date of birth Gross Income and Social Security received Pub 4012 D-1 Filing Status Pub 4012 B-1, B-2, B-3 NTTC Training – 2014

Intake & Interview Sheet Confirm with picture ID NTTC Training – 2014

Who Must/Should File U.S. citizens Residents of the United States Pub 4012 A-1, A-2, A-3 charts that identify persons required to file tax returns and those who should file Must file – A-1, 2 and 3; Should file-A-3 NTTC Training – 2014

Chart A Footnotes Pub 4012 pg. A-1 If born before January 2, 1950, considered 65 for 2014 Gross income is all income not exempt from tax – may include Social Security Married Filing Separately (MFS) or not living with spouse at end of year with gross income of $3,950 or more must file NTTC Training – 2014

Are You or Could You Be a Dependent? Intake Sheet Part I, Q. 11 NTTC Training – 2014

Dependents Who Must File Pub 4012 pg. A-2 Single or married? 65 or older? Blind? Income – earned and unearned? The income threshold for dependents may be much less Review 4012 chart B at pg. A-2 with participants NTTC Training – 2014

Must File Owe additional taxes $400 or more net self-employment income Pub 4012 pg. A-3, Chart C Owe additional taxes Form 5329 – IRAs Unreported tips – social security/ Medicare taxFirst Time Home Buyer Credit repayment $400 or more net self-employment income Over $108.28 of wages from church Received APTC from Health Insurance Market Place Note some church employees are subject to special tax rules and are out of scope NTTC Training – 2014

Who Should File Pub 4012 pg. A-3, Chart D Claiming refund of withheld taxes or estimated tax payments Claiming any refundable credit (credit independent of taxes owed) Earned Income Credit Additional Child Tax Credit Education Credits State return required NTTC Training – 2014

Verify Taxpayer Identity Valid Taxpayer Identification Numbers Social Security Number (SSN) Individual Taxpayer Identification Number (ITIN) Adoption Taxpayer Identification Number (ATIN) NTTC Training – 2014 03Filing Status 2008x3 10

Taxpayer Identification Number Best – Social Security card or ITIN (Individual Taxpayer Identification Number) letter Alternatives Other documents issued by Social Security Administration such as SSA-1099 -OR- Government-issued ID plus TaxWise carry- forward of last year’s return Must have photo ID – Exceptions by LC in “Extreme Conditions”. Alternates for SS Verify – Income Statements (1099-SSA), Letters from SS or other SS documents. Medicare card with suffix A NTTC Training – 2014

Decedent Tax Returns Surviving spouse filing? Someone else filing? Verify survivor’s identity Someone else filing? Ask to see authorizing document Verify representative’s name and identity Advise them to file Form 56 with IRS, if applicable and not yet done If representative does not have the documentation with them, they should be invited to return when they do Form 56 is available from the IRS and at IRS.gov It is to advise the IRS that the person is acting as the fiduciary for the taxpayer, or that they are not longer the fiduciary This is not required when the representative is acting under a power of attorney It is not required of a surviving spouse acting for deceased spouse NTTC Training – 2014

Filing a Return Use only Form 1040 in TaxWise® Electronic filing (e-file) only unless IRS requires a paper return Electronic filing site! NTTC Training – 2014 03Filing Status 2008x3 13

Record Keeping Basic record keeping requirements Taxpayer should keep copy of all records used to file tax return Three years from date return was filed Two years from date tax was paid See Pub 17 for additional requirements Caution – state statute may be longer than 3 years Taxpayers should keep a copy of their tax return for forever NTTC Training – 2014

Additional Information Pub 4012, Tab P Publications and Forms Frequently Asked Questions Taxpayer Civil Rights NTTC Training – 2014

Must/Should File Quiz #1 Miranda, 17, claimed on her parents’ return W-2 shows $2,000 in wages and federal tax withheld of $155 Grandparents gave her a $3,000 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 (Lesson 8) NTTC Training – 2014 00Admin 2010x

Must/Should File Quiz #2 Kathy, 22, attends college full time Earned $850 babysitting (not an employee) $3,000 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 NTTC Training – 2014 00Admin 2010x

Notes… This lesson covers who must/should file Federal return State requirements (if applicable) may differ Federal return must be completed to prepare state return in TaxWise NTTC Training – 2014

Filing Basics Quality Review Verify name with social security document Verify ID with picture identification Verify representative’s authority Any changes from prior year? NTTC Training – 2014

Who Must/Should File Questions? Comments… NTTC Training – 2014

IRS Issued Identification Numbers Pub 4012 Tab L Pub 4491 Part 1 NTTC Training – 2014

IRS Issued Identification Numbers ITIN – Individual Taxpayer Identification Number ATIN – Adoption Taxpayer Identification Number Used in place of social security number NTTC Training – 2014

ITIN IRS issues ITIN to individual who must have U.S. taxpayer identification number Do not have, and are not eligible to get, Social Security Number (SSN) ITINs are issued regardless of immigration status ITIN is tax identification number for IRS only ITIN is not a form of identification Emphasize ITIN does not “legalize” an illegal immigrant It does not confer a right to work It merely provides an avenue for them to comply with the income tax laws NTTC Training – 2014

To Obtain an ITIN Taxpayer completes W-7 application (W-7S for Spanish language preference) Attaches required documents proving identity Files with tax return Tax return cannot be e-filed Taxpayer can also walk documents into IRS Taxpayer Assistance Center or authorized Acceptance Agent To have future communication with IRS in Spanish, use W-7S Limited exception to filing when no tax return is required Effective 1/1/13, only acceptable documents are: Passport (stand alone document) National identification card (must show photo, name, current address, date of birth, and expiration date) U.S. driver's license Civil birth certificate (required for dependents under 18 years of age) Foreign driver's license U.S. state identification card Foreign voter's registration card U.S. military identification card Foreign military identification card Visa U.S. Citizenship and Immigration Services (USCIS) photo identification Medical records (dependents only – under 6, under 18 if a student) School records (dependents only – under 14, under 18 if a student) NTTC Training – 2014 01CourseIntro 2010 24

ITIN IRS processing time 6 weeks (or more) Newly issued ITINs expire if not used within five years Once gets SSN Taxpayer should notify IRS Will combine tax records under new SSN If continued need for an ITIN after 5 years, need to reapply NTTC Training – 2014 01CourseIntro 2010 25

ITIN Starts with a 9 Middle 2 digits are within certain numeric range set by IRS TaxWise identifies an ITIN when it is entered NTTC Training – 2014

Taxpayer with ITIN Verify ITIN ITIN returns can be e-filed IRS ITIN letter or ITIN card ITIN returns can be e-filed Taxpayer and/or spouse ITIN NTTC Training – 2014 01CourseIntro 2010 27

With ITIN Can claim dependency exemption for dependents Can claim child tax credit/additional child tax credit Can claim child/dependent care credit Cannot claim earned income credit If obtain SSN within 3 years, can amend NTTC Training – 2014 01CourseIntro 2010 28

ITIN Taxpayer may be using a SSN that is not their own W-2 may reflect that bad SSN Do not change any info on W-2 On W-2 input, enter SSN as on W-2 NTTC Training – 2014

ITIN TaxWise recognizes ITIN Checks W-2 ITIN box and makes required input field red NTTC Training – 2014

ITIN If no SSN nor ITIN for Taxpayer Use “Apply for ITIN” option Complete return Cannot be e-filed In TWD, use File>Apply for ITIN NTTC Training – 2014

ATIN Taxpayers need ATIN for their adoptive child if In process of adopting child Unable to get SSN for any reason Able to claim child as dependent, or Able to claim child and dependent care credit The child is legally placed in your home for adoption by an authorized placement agency. The adoption is a domestic adoption OR the adoption is a foreign adoption and the child/children have a permanent resident alien card or certification of citizenship. You cannot obtain the child's existing SSN even though you have made a reasonable attempt to obtain it from the birth parents, the placement agency, and other persons. You cannot obtain an SSN for the child from the SSA for any reason. (For example, the adoption is not final). NTTC Training – 2014

ATIN Taxpayer submits Form W-7A with copies of required documents to IRS IRS issues ATIN for child if Final domestic adoption is pending, and Adopting taxpayers do not have child’s SSN Mailed to IRS, 4 – 8 weeks to process Copies (not originals) of the placement documents are required: A placement agreement entered into between you and a public or private adoption agency. A document signed by a hospital official authorizing the release of a newborn child to you for legal adoption. A court order or other court document ordering or approving the placement of a child with you for legal adoption. An affidavit signed by an attorney, a government official, etc., placing the child with you pursuant to the states' legal adoption laws. The placement documentation is sometimes referred to as "Placement Agreement"; "Surrender Papers"; "Temporary Placement Paperwork"; "Placement Order" etc. This documentation termed differently from state to state must clearly establish that the child was placed in your home for purposes of adoption by an authorized adoption agency (or agent), and must include the following information: Adoptive Parent(s) full name Child's full name Name of the Placement Agency or Agent The date the child was placed in the adoptive parents home. The signature of the parent or parents (the adopting taxpayers) and that of an official representative of the authorized placing agency or agent. NTTC Training – 2014

ATIN When the adoption becomes final IRS will deactivate ATIN Adopting parents obtain SSN for child AND Notify IRS of new SSN IRS will deactivate ATIN IRS will deactivate ATIN automatically after two years Extension can be requested if adoption not yet final NTTC Training – 2014

Child with ATIN Can claim dependency exemption Can claim child or dependent care credit Can claim child tax credit/additional child tax credit Can claim adoption credit – out of scope Assumes all other requirements are met NTTC Training – 2014

Child with ATIN Cannot claim Earned Income Credit with ATIN Can claim EIC with other qualifying children who have SSNs Can amend when get SSN for adopted child NTTC Training – 2014

ATIN Like an ITIN, nine-digit ATIN begins with number 9 Use ATIN on return wherever child’s social security number is requested NTTC Training – 2014

Taxpayer Summary – ITIN/ATIN Provide taxpayer copy of W-7 form and instructions if they have to complete Remind taxpayer of expiration date Need to reapply or extend? Remind taxpayer of ability to amend when they get SSNs NTTC Training – 2014

IRS Issued Identification Numbers Questions? Comments… NTTC Training – 2014