August 28, 2015 TaxWise Software Changes for Tax Year 2011 CCH Presentation Excerpts From Dallas, TX July With updated Information by HM Riggert NY3

Incidents: Rejected Returns (AARP) 5,431 of 31,484 August 28, USA2 Reject CodeQtyExplanation R Invalid MeF schema. Sch A filed prior to updating software Employer EIN does not match IRS Master File R MeF Primary SSN/Name Control Mismatch R MeF Dependent SSN/Name Control Mismatch Secondary SSN/Name Control Mismatch R MeF Spouse SSN/Name Control Mismatch Spouse SSN/Name Control Mismatch Dependent SSN/Name Control Mismatch F1099R MeF 1099R EIN does not match IRS Master File FW MeF W2 EIN does match IRS Master File Total Rejects: 125,150

Incidents: Software Functionality 4,603 of 21,433  These are software functions that generated “How Do I” questions.  Carryforward Prior Year Returns  Desktop  TaxWise Online (* Adding a Restore All feature) – Former Desktop users were used to deleting returns, therefore, they deleted TWO returns in error  Versions  Program, States, Federal  New Return  New Return is grayed out in Desktop  New Return Button is missing in TWO  Printing Setup  Print Sets in TWO  Print Packets in Desktop August 28, USA3

What’s Changing in the world of Support  Expansion of hours in West Coast Support Center  Allows primary SFS support to staff more appropriately for known peak hours  Modifying CRM (Customer Records Management) system to streamline the call flow process  Streamline the logging process to allow for more targeted data mining opportunities and to reduce the amount of required after call work  More visible indicator each time the rep logs into the CRM if they have an unsolved callback  Capture repetitive operating system type information so we don’t have to spend time gathering the data when the customer calls (i.e., Operating System, network, internet connectivity, etc.)  Changes to screening and hiring process  Support Center vs Call Center  Incorporate more screening surrounding research capabilities August 28, USA4

What’s Changing in the world of Support  Changes to the training process  Reset focus on knowledge libraries available to the agents  Walk through New Day 1  Efforts to expand and retain experience  2010: We had 70 returning seasonal reps  2011: We had 17 returning seasonal reps (moved facility to a different state)  Keeping 38 reps through summer as a long-term temporary assignment  40 additional reps are eligible for 2012 seasonal assignment August 28, USA5

TaxWise Online Enhancements – A look ahead  Speed  All communication is through a secure server and connection.  New Features  Restore Returns  Introducing the Function Keys  Enhanced Help Center  Calculated entries August 28, USA6

TaxWise Online Enhancements – Function Keys  Users will have the ability to use some Function Keys in TaxWise Online  Mimics how Desktop works and makes transition from Desktop to TWO easier  F1 – Opens Program Help  F3 - Toggles between required/not required  F8 – Toggles the override feature  F9 – Links (already available) 06/14/ USA7

TaxWise Online Enhancement – Help Center  The TWO Help Center is being redesigned by removing links not used and adding the following  Click a link to quickly access the pre-recorded TaxWise Online lessons  Quick access to a page that will show the following  1040 version  1040 release notes  state version numbers  state release notes 06/14/ USA8

TaxWise Online Enhancement – Restore Returns  Multiple Deleted Returns can now be restored using the Restore Returns feature  The ADMIN user or anyone assigned the Administrator role can see the list of deleted returns and choose to restore one or all August 28, USA9

TaxWise Online Enhancement – Inactive User List  If the ADMIN user or any user with the rights to create users creates a username that exists in the inactive user list the following message will display  This messaging is applicable to any of the web applications that utilizes UUMS (Unified User Management System)  TaxWise Online  TaxWise University  Support Site August 28, USA10

TaxWise Online Enhancement – Calculated Entries  User is displayed a warning when they try to enter data or select a calculated entry  Mimics the calculated entry behavior in desktop  State Direct deposit or Electronic Funds Withdrawal entries will link back to the state interview page if the State interview is used  Reduces confusion on how to enter the direct deposit or electronic funds withdrawal August 28, USA11

Changes that affect both product lines  The IRS has passed several changes this year that affect both TaxWise Online and TaxWise Desktop  Schedule D Changes including adding new form 8949  IRA Worksheet  ITIN change  1098C VIN Verification  Mileage Rates Changed on July 1, 2011  Introduction of Preparer User Form August 28, USA12

Schedule D Changes and New Form 8949  Assets are no longer entered directly on the Schedule D  Added Form Page 1 is for short term, Page 2 is for long term  Removal of the Long Term/Short Term Capital Gains Worksheets from Find a Form  Capital Gains worksheet will load the 8949 and put the assets on the appropriate page and is the only place to designate assets as Taxpayer, Spouse, or Joint  New A/B/C indicators will be on the Capital Gains worksheet under the 1099 column  Column (b) Code for type of adjustment reported in column (g) (e.g. offset home loss) August 28, USA13

Schedule D Changes – Sample 1099-B August 28, USA14 New Req’t Entries not required for: Items other than stocks Purchases before 2011 Most Mutual Funds Stocks held in a DRIP

Schedule D Changes and New Form 8949 August 28, USA15 You can have 3 Form 8949s since only one Box can be checked on each form.

Schedule D Changes and New Form 8949 August 28, USA16 Schedule D no longer shows individual transactions, just totals. Data shows a home sale with an adjustment to offset the loss and the $35 sales commission for the stock sale on the 1099-B. 8,859 10,123 (35) (1,299)

Deductible and Nondeductible IRA Worksheet  Changes to the IRA Worksheet include  Line 10: Changed the wording to Enter Traditional Contributions for 2011  Added the word Contribution to each section header to make it more noticeable  Line 20: Bold the words Enter Roth IRA contribution for /14/ USA17

1098C – VIN Number Validation  Vehicle Identification Number’s entered on the 1098C will be Validated in 2011  The tax applications will require the VIN number on the 1098C per the new IRS rules.  If the VIN entered is not consistent with the algorithm, the user will be displayed a message  More information will be distributed on this prior to season. 06/14/ USA18

ITIN Changes  If the taxpayer enters an ITIN for the taxpayer identification number instead of a social security number, then the social security number box on W-2 and 1099 forms will not be filled in automatically.  The taxpayer identification number that appears on the W-2 and 1099 forms will have to be entered by the counselor.  This change was made because some taxpayers with ITINs had different numbers on those forms. 06/14/ USA19

Mileage Rates Changed July 1, 2011  Schedule C or C-EZ business mileage must be split between the two halves of the year: 51 cents per mile for the first half and 55.5 cents per mile for the second half.  Medical mileage deductions must also be split between the two halves of the year: 19 cents per mile for the first half and 23.5 cents per mile for the second half.  The charitable-related mileage remains constant at 14 cents per mile all year. 06/14/ USA20

Preparer Use Form – Dedicated to Prep Use Fields  The Preparer Use Fields are deleted from the Main Information Sheet  Preparer Use Form will allow the sites to enter up to 25 questions and utilize 25 Preparer Use Fields  All Preparer Use fields will be standardized to a 15 character alpha- numeric field  All Preparer Use Field entries will be stored in the database for reporting purposes (not the question)  Taxpayer Reminder field  Enter information that you need the preparer to be aware of the following year (e.g. A statement that this return includes a loss-carryover)  Will automatically display when a return is started in TY 2012 (January, 2013) August 28, USA21

Preparer Use Form – TaxWise Desktop  Load the Preparer Use Form in Tax Form Defaults  Enter up to 25 questions in column A  Enter up to 76 characters  Helps preparers gather information needed for reports  Questions are not stored in the database  11 through 15 are Disability, Foreign Language, Counselor, Reviewer, SIDN  Enter a locked or unlocked history list for each question  15 character alpha-numeric entries  The entry field is automatically marked as required if a question is entered  All 25 entries are stored in the database  Reportable in desktop and via the report server August 28, USA22

Preparer Use Form – TaxWise Online  Enter the Questions and locked list in Settings  Enter up to 25 questions in column A  Enter up to 76 characters  Helps preparers gather information needed for reports  Questions are not stored in the reports database  11 through 15 are Disability, Foreign Language, Counselor, Reviewer, SIDN  Enter a history list for each question, if desired  15 character alpha-numeric entries  The entry field is automatically marked as required if a question is entered  All 25 entries are stored in the database  Reportable in TWO reports and via the report server August 28, USA23

Legacy vs Modernized E-file  Challenges from a Vendor perspective  Supporting dual platforms  Legacy sunsets October, 2012  Start dates of e-file platform differences  80% of our return base could have gone MeF during the first week  Reacting to User Experience changes  Challenges from a Preparer perspective  Lack of screen shots and practice due to release timing  Confusion over how to migrate new processes into existing processes  Submission ID vs DCN  New state e-file methodology  E-file errors vs validation errors August 28, USA24

Modernized e-File: Form Set  Balance of 1040 Form set now supports MeF with the following exceptions  1040 NR and 1040X  The published start date still has MeF opening the week after legacy  Industry has made recommendations for the IRS to start accepting MeF returns at the same time they start accepting Legacy e-files  E-filing of Prior Year Returns  With MeF, you’ll be able to e-file the current tax year plus 2 prior years, starting with tax year 2010 returns. For example, a tax year 2010 return will be e-fileable until the end of 2013 August 28, USA25

Modernized e-File: PDF Attachments in Desktop  Desktop will support PDF attachments, but AARP is not utilizing this for Tax Year 2011  IRS is not requiring the attachments for TY 2011  PDF attachments will be required for TY 2012 (January, 2013) – May have to consider these returns as out-of-scope if we don’t have scanners.  Entries that allow a PDF attachment will be listed on the form with a checkbox  Click the applicable checkbox  Windows browser window will display  Select the appropriate PDF  TaxWise verifies the file is in the correct format (.PDF)  De-select the box to remove the PDF attachment  TaxWise includes the attachment with the e-file August 28, USA26

Modernized e-File: PDF Attachments in TaxWise Online  Select the entry on the form and a browser box displays for the attachment  Only Printable Document Files (PDF) are allowed  User receives error message when not attaching a *.PDF file  All attachments are scanned for virus protection  Uncheck the box to remove the PDF attachment  One attachment per entry  Works in both Default Mode and Classic Mode  Users must Browse to the *.PDF  Checkmark goes away if the PDF is not loaded and you cannot type in the browse box  Note: The browser box is different between Default mode and Classic Mode August 28, USA27

Modernized e-File: State Methodology  Beginning filing season 2012 (tax year 2011), CCH Small Firm Services (TaxWise) has made a business decision to support both linked and unlinked state e-file submissions for the Modernized e-File program (MeF).  The state e-file submissions will default to link for states that are participating in the MeF program. The site will have the option to change the state e-file submission to unlinked for situations where the state return needs to be filed prior to or without the Federal e-File.  New York will not participate in the MeF program this season, therefore, all returns will be unlinked. August 28, USA28

Modernized e-File: State Methodology  What does linked and unlinked mean to your site?  Linked return is when IRS will not make the state return available until the Federal return is accepted.  Unlinked return is when the state return will be made available to the state agency at the time of submission. The state processes the return without knowledge of the Federal filing status.  If the federal return cannot be created using the MeF program and is e-filed using the legacy program, the state return will also utilize the legacy process and the state e-file will be generated as a state-only return. The TaxWise applications will continue to indicate when the Federal e-file has been accepted to allow you to more easily send the state after the Federal return has been accepted. August 28, USA29

Customer Support Site – Your Solutions Center  Changing the format to be more inviting and easier to access information.  The Solutions Center will be the landing page that will give the sites immediate access to the following without requiring a login  Blogs  Hot Topics  Knowledge Base  Calendars and Charts  Links to key items on August 28, USA30

Customer Support Site – Your Solutions Center August 28, USA31

Customer Support Site – SFS University August 28, USA32

Customer Support Site – SFS University August 28, USA33

Customer Support Site – SFS University August 28, USA34 These are interactive videos requiring creating an account. Courses include Tests. E.g. The video instructs to select New W2 – You must do so to proceed. You can print a copy of the course and you can print a completion certificate.

Customer Support Site – Password Recovery  Adding an additional option for changing the ADMIN password:  3 failed login attempts  3 attempts to enter the security question  Enter the address on file for the ADMIN user  If the address matches the address on file for the ADMIN user, the password will be reset to a temporary password  ed to the address on file for the ADMIN user  Automatically requires the password to be changed This enhancement also applicable with TWO Admin Password August 28, USA35