1. EKS 1 SCENARIO-BASED TRAINING

2. IN THIS SCENARIO YOU WILL LEARN
Who must file
Filing Status
Exemptions: personal exemption
Income- taxable v. nontaxable
W-2 income
Standard deduction
Refundable and nonrefundable credits
-EITC
ACA- full year coverage through employer
Direct Deposit

3. LET’S GET STARTED
This will be you!

4. 1. SCENARIO WILLIAM WASHINGTON
Let’s meet the taxpayer

5. I AM WILLIAM WASHINGTON
Hello!
I AM WILLIAM WASHINGTON
I love working at Kaizi. We’re a startup. We’re a new social media site that can order & deliver you food, drive you places and stream your favorite tv shows. Our catered lunches are sick (in a good way).

6. INTERVIEW NOTES I’m a Pisces. I’m 27. My birthday is March 11.
I’m not married.
I’m still looking for “the one”.

7. FACTS ABOUT ME:
I only work part time, but they still give me health coverage. I love startups!
I had interest from my savings account, but it was less than a $1.

8. 2. SCENARIO 1 WILLIAM WASHINGTON
Let’s look at the Intake/Interview Sheet

9. What questions should we ask William?

10. What forms should we look for?

11. What do we do with grey box?

12. INTERVIEW NOTES No 1095-B Direct Deposit Did not itemize
Has insurance but can’t find the form.
Direct Deposit
If he gets a refund, he wants to deposit it in his checking account. He brought the numbers.
Did not itemize
He took the standard deduction last year.

13. BEFORE DIVING IN... Does William need to file? Is the return in scope?

14. WHO SHOULD & MUST FILE MUST FILE
Your filing requirement depends on filing status, age, and gross income.
SHOULD FILE
Sometimes a taxpayer does not meet the filing requirements, but they should file anyway.
A1-3

15. IS THE RETURN IN SCOPE OUT OF SCOPE
Scope varies by certification. Generally Rental Income, Cancellation of Debt, Married Filing Separately and Small business income with employees, inventory, depreciation and more than $25,000 in expenses.
IT DEPENDS
Many things are in scope but have caveats – see notes in 4012.
9 – 11

16. A SIMPLE WAY TO DECIDE
Did you learn how to do it in class or was there a test question about it?
If not, then don’t do it! Ask your
Site Coordinator.

17. 3. SCENARIO 1 WILLIAM WASHINGTON
1040 Step by Step

18. FILING STATUS
Filing status is based on marital status and family situation and determines the rate at which income is taxed.
A taxpayer may be eligible for more than one filing status. The taxpayer should choose the filing status that results in the lowest tax. B1

19. 5 FILING STATUSES Married Filing Jointly Married Filing Separately
Legally married people file together
Married Filing Separately
Legally married people file separately
Single
Not married, never been married, legally divorced
Head of Household
An unmarried or considered unmarried person with a qualifying dependent
Qualifying Widow/Widower
A taxpayer whose spouse has died in the prior two tax years AND they have a qualifying dependent.

20. What is William’s filing status?B1

21. Exemptions reduce the taxpayer’s taxable income
PERSONAL EXEMPTION
Exemptions reduce the taxpayer’s taxable income

22. PERSONAL EXEMPTIONS
Two types of exemptions - personal exemption and dependency exemption
Each exemption is worth $4,050 for each person for
the 2016 Tax Year
C1-2

23. Can William claim a personal exemption?

24. WATCH instructor
Enter William’s Personal Information, Filing Status and Personal Exemption K8

25. Now you try
Enter William’s Personal Information, Filing Status and Personal Exemption K8

26. INCOME Taxable Non-taxable Wages Cash Income Lottery winnings
Jury Duty Payments
Interest & Dividents
Non-taxable
SSI
Child Support
Veteran’s Benefits
TANF D1

27. Scenario 1 Wages

28. WATCH instructor
Enter William’s W-2
D9-10

29. Now you try
Enter William’s W-2
D9-10

30. DEDUCTIONS Deductions reduce your taxable income.
TaxSlayer calculates the Standard Deduction for you.

31. ITEMIZED vs. STANDARD DEDUCTIONS
A fixed dollar amount based on filing status. Taxpayers born before 1951 or blind may be eligible for a larger standard deduction
Itemized
Uses your qualified expenses like mortgage interest, medical or dental expenses, charitable contributions F

32. Which deduction should William claim?F1

33. Let’s look at William’s
Standard Deduction

34. REFUNDABLE vs. NON-REFUNDABLE
Refundable credits allow taxpayers to lower their tax liability and receive as a payment once liability is zero.
Non-Refundable
Nonrefundable credits allow taxpayers to lower their liability to zero.

35. REFUNDABLE vs. NON-REFUNDABLE
Additional Child Tax Credit
American Opportunity Tax Credit – Education Credit
Earned Income Tax Credit
Non-Refundable
Child & Dependent Care Credit
Lifetime Learning - Education Credit
Retirement Savings Credit
Child Tax Credit
Less common:
Credit for Elderly or the Disabled
Foreign Tax Credit

36. EARNED INCOME TAX CREDIT
A credit for people with earned income…and it’s refundable! .

37. EARNED INCOME TAX CREDIT
Part A
Rules for Everyone
Part C
Rules if you do not have a qualifying child
Taxpayers & qualifying children must all have SSN that is valid for employment
Must be at least age 25 but under age 65 as of December 1
Filing status cannot be married filing separately
Cannot be the dependent of another person
Must be a US Citizen or resident alien all year
Must have lived in the United States more than half the year
Cannot file Form 2555 or Form 2555-EZ (re: foreign income)
Cannot be a qualifying child of another person
Investment income must be $3,400 or less
I-2

38. WATCH instructor
Enter William’s EITC
I-6

39. Now you try
Enter William’s EITC
I-6

40. AFFORDABLE CARE ACT
Every taxpayer is required to have health coverage and report that coverage on their tax return

41. ACA
Under the Affordable Care Act (ACA), the federal government, state governments, insurers, employers, and individuals share responsibility for improving the quality and availability of health insurance coverage in the United States.
The ACA reforms the existing health insurance market by prohibiting insurers from denying coverage or charging higher premiums because of an individual’s preexisting conditions.

42. ACA The ACA also creates the Health Insurance Marketplace.
The ACA requires individuals to have qualifying health care coverage (called minimum essential coverage, or MEC) for each month of the year, qualify for a coverage exemption, or make a shared responsibility payment (SRP) when filing their federal income tax returns.

43. THREE OPTIONS MEC Exemptions SRP Minimum Essential Coverage
Taxpayers will receive 1095-A, 1095-B or 1095-C as proof of coverage. Only A is required if covered through the marketplace.
Exemptions
Some taxpayers are exempt from having coverage
SRP
Shared Responsibility Payment
ACA

44. Enter William’s ACA information
WATCH instructor
Enter William’s ACA information
ACA 1-3 F1

45. Enter William’s ACA Information
Now you try
Enter William’s ACA Information
ACA 1-3

46. SAVINGS IS A BIG PART OF TAX TIME
Ask every taxpayer if they want to save part of their refund.

47. Would you like to save part of your refund today?
Tax time is the perfect time to save for an emergency, a college savings account or another life dream you have.

48. SAVE SOME. SPEND SOME.
Use Form 8888.

49. WITH FORM 8888 THERE ARE OPTIONS
Checking Account
Savings
Account
Savings
Bond

50. WHAT DOES WILLIAM WANT TO DO WITH HIS REFUND
CHECK
Mailed check can take several weeks.
DIRECT DEPOSIT
Usually deposited in 7-10 days. You need the bank account and routing numbers. .
K14-15

51. Enter William’s Direct Deposit Information
WATCH instructor
Enter William’s Direct Deposit Information
K14-15

52. Enter William’s Direct Deposit Information
Now you try
Enter William’s Direct Deposit Information
K14-15

53. 4. SCENARIO 1 WILLIAM WASHINGTON
Finishing the return

54. CHECK YOUR WORK QUALITY REVIEW
Review entries:
Basic Information - filing status & exemptions
Income: W-2
Credits: EIC
ACA: MEC
Do we have matching AGI & refund?

55. AGI (2015 calculations) Federal Refund (2015 calculations)
$13,280
AGI (2015 calculations)
$243
Federal Refund (2015 calculations)

56. FINISHING THE RETURN Ask the custom questions
All returns must be Quality Reviewed
Print returns (Federal and State) for Taxpayer
Review return with taxpayer
Have Taxpayer and Spouse sign 8879s for Federal and State
Remind them they are responsible for their return and by signing, they are agreeing it is accurate – 1 for the taxpayer, 1 for the VITA site
Not sure if this is really true in taxslayer

57. YOU DID IT!
Any questions?

58. WORKOUT
Filing Status
Exemptions
EITC

59. CREDITS
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