1. TAX-AIDE TY 2014 Scope Updates What’s In – What’s Out Clarify Rental Income Instructor Workshop - 2014 1

2. TAX-AIDE Cancellation of Debt ● Credit Card Debt Now part of Advanced certification ● Foreclosure of Primary Home Out-of-scope Instructor Workshop - 2014 2

3. TAX-AIDE In – Long Term Care Benefits ● LTC Insurance Contracts – Generally reimbursements not Taxable Per diem costs up to an aggregate limit are non-taxable ● Reported to taxpayer on 1099-LTC ● If required, complete Form 8853, Section C (Sections A and B remain out-of-scope) Instructor Workshop - 2014 3

4. TAX-AIDE Form 1099-LTC Instructor Workshop - 2014 4 Source Document to Taxpayer from Insurer

5. TAX-AIDE Form 8853Form 8853 Instructor Workshop - 2014 5

6. TAX-AIDE In – Waiver Request for Failure to Take Required Minimum Distribution (RMD) ● Taxpayer can request waiver of additional tax for failure to take RMD from qualified retirement plan ● Add’l Tax = 50% of amount not taken Counselor NOT expected to review all taxpayer plans and verify that required distributions were taken Instructor Workshop - 2014 6

7. TAX-AIDE Waiver Request – Failure to Take RMD ● Part VIII of Form 5329 in scope Instructor Workshop - 2014 7

8. TAX-AIDE In – Cash Rental Income for Land ● Income from Land Rental in scope if reported on a 1099-MISC Cash income also now in scope ● Income is reported on Schedule E ● NO expenses are allowed Property taxes may be a Schedule A deduction Instructor Workshop - 2014 8

9. TAX-AIDE In – 1099-R Codes ● Several clarifications/updates to codes that are in scope – see Pub 4012, pg D-20. Examples: 6 – tax-free exchanges D – Annuity payments from nonqualified annuities F – Charitable gift annuity S – Early distribution from a SIMPLE IRA in the first 2 years no known exception Instructor Workshop - 2014 9

10. TAX-AIDE Out – 15% Depletion Allowance Expansion to all States ● Tax law states taxpayer should take greater of cost or percentage depletion ● Cost depletion calculation is out of scope ● No way to determine which is greater, percentage depletion is out of scope ● APPEALED to SPEC. New Position States already doing % depletion OK. No expansion at this time. Instructor Workshop - 2014 10

11. TAX-AIDE Out – Self-Employed Health Insurance ● Reportable as Adjustment to income on Line 29 if self-employed and had a net profit for the year ● Request to add to scope for those on Medicare not approved by SPEC ● Resubmit next year once better understand impact of ACA Instructor Workshop - 2014 11

12. TAX-AIDE Out – Waiver of Underpayment Penalty – Form 2210 ● Proposed using waiver of penalty on Form 2210, page 2 or 3 instead ● Rejected – concerned that Counselors will not properly waive any calculated penalty and taxpayer might overpay Instructor Workshop - 2014 12

13. TAX-AIDE Out – Simplified Option for Home Office Deduction ● Alternative to calculation, allocation, and substantiation of actual expenses $5 per ft² (unless daycare) on up to 300 ft² No depreciation ● Must still meet qualified business use requirements ● Rejected by NTTC Significant additional training required Instructor Workshop - 2014 13

14. TAX-AIDE Rental Income – NTTC Review ● Out of Scope Considered Single room – ½ duplex Not for Profit ● Impacts Pub 4491 Training not Sufficient All Not-for-Profit OOS (Pub 4491) ● Taxpayer has option to build tax prep cost into Rental Instructor Workshop - 2014 14

15. TAX-AIDE Rental Income ● Consensus of Committee Oppose addition of Rental Income to scope Additional Training Requirements to ensure volunteers sufficiently trained to ensure an accurate return Instructor Workshop - 2014 15

16. TAX-AIDE Scope Updates Questions? Comments… Instructor Workshop - 2014 16