Final NJ Training TY Quality Review Is Mandatory What? Why? How? Who? Module NJ 1.32

Quality Review Summary A MUST for ALL tax returns including PTRs NO EXCEPTIONS Need 3 or more counselors at each site Requires verification Filing status and eligibility as a dependent Input data from all source documents Key information is not overlooked Compare with prior year return (if available) QR must be by a 2 nd Certified counselor For paper returns, effectively re-do the return

Significant Issues and Problems Strict adherence to “NJ Can Do/Cannot Do List” Proper handling of tax exempt interest and dividends Failure to include taxable NJ Property Tax Refunds (Homestead Rebate and PTR) on Federal Return Accurate completion of Schedule C-EZ, Business Income Accurate completion of questions on EIC Worksheet Failure to complete of NJ IRA Worksheet(s) to ensure inclusion of all IRA Distributions in NJ1040 Reporting rent and/or property tax on NJ Property Tax deduction or credit worksheet and/or NJ1040 Rebate application for tenants Accurate preparation of NJ and NY Returns for NJ Residents with NY W-2s Carry forward of proper amounts of Taxable NY Income & NY Tax Liability to the appropriate NJ form

Final NJ Training TY Common Errors Incorrect data entry of : NamesAddresses DOBSSN Filing status and dependency determination Entry errors from W-2 and/or 1099 information Either in income & tax withholdings Missing or incorrect EIN and Payer ID Improper completion of EIC Worksheet Improper entry of RRB-1099R Entry of 1099-OID as tax exempt

TOP TEN PROBLEMS USING TAXWISE 1. Improper OVERRIDES! 2. Improper use of punctuation 3. Incorrect entry of last name – spouse/dependents 4. Not linking to 1099MISC from Sch C-EZ 5. Use of scratch pad when existing worksheet or schedule

TOP TEN PROBLEMS USING TAXWISE 6. Adding new form when already existing form 7. Not recreating e-file as last item before exiting return – thus creating an invalid e-file 8. No or incorrect state adjustment for interest and dividends 9. Improper completion of Sch EIC worksheet 10. Zero cost basis for capital gains 11. Failure to input medical expense and real estate taxes on Federal Schedule A (Need for NJ return)

Final NJ Training TY st Steps In QR Process Run Diagnostics e-file errors Identify overrides – Why/Impact On Return Review Forms Tree Any RED exclamation points(!!!) If so, determine if there is any significant missing data and/or potential impact on accuracy of return

Final NJ Training TY Taxpayer Information Verification Name: taxpayer, spouse and dependents Address SSN Date of Birth Must Match IRS Master File

Final NJ Training TY Source Documents Compare all source documents with data input This can be done different ways Review of data on monitor Use print out of input documents Review completed return Manual Returns – Add total income and withholdings on W-2s, 1099s and compare to tax return

Final NJ Training TY Paper Returns In effect, redo the return! Check all footings and calculations Calculations on Schedules & Worksheets if applicable Schedule D Capital Gains and Losses Simplified Method for determining taxable pension amount Social Security Worksheet for determining amount taxable Tax Liability check amount to Tax table, or Qualified Dividend and Capital Gain Tax Worksheet Tax Credit forms

Final NJ Training TY Who? Quality Review requires a “second set of eyes.” It cannot be done by the counselor who prepared the return Must be a certified counselor The taxpayer CAN NOT be the “second set of eyes”

Final NJ Training TY How? Locations with several tax preparers (Larger Sites) One person is designated to do QR Same person may also be responsible for helping TP prepare Intake Sheet Can rotate this position periodically Locations with fewer tax preparers (Smaller Sites) Designate one person to do QR, if practical, rotate periodically OR Preparers exchange returns with other preparers Requires at least 2 preparers at every site & for Shut-In Returns