1. TAX-AIDE Instructor Workshop What’s New in 2013 Highlights Janelle Riedl – AZ TRS AZ Instructor Workshop TY131

2. TAX-AIDE Agenda ● Volunteer Certification Changes ● New Plastic Project ● Training Products ● Tax Law Changes ● AARP Scope Changes ● TaxWise Changes ● Arizona Changes AZ Instructor Workshop TY132

3. TAX-AIDE Volunteer Certification Changes Source: IRS Fact Sheet AZ Instructor Workshop TY133

4. TAX-AIDE New This Year for All Volunteers ● Volunteer Standards of Conduct (VSC) – Ethics — Pub 4961 will include training and certification on the Intake/ Interview and Quality Review Processes Approximately 10 questions AZ Instructor Workshop TY134

5. TAX-AIDE Changes to Counselor Certification Test ● Test reduced from three (Basic, Intermediate and Advanced) to two independent tests (Basic OR Advanced) AARP Tax-Aide will certify to Advanced Approximately 40 questions ● HSA and COD remain as independent certification AZ Instructor Workshop TY135

6. TAX-AIDE Required Training ● Client Facilitators Client Facilitator Training ● Counselors Interview & Intake Quality Review Volunteer Policies and Procedures ● Local Coordinator Policies and Procedures AZ Instructor Workshop TY136

7. TAX-AIDE Take Test on Link & Learn ● Log into Link & Learn ● Create account ● Take and pass VSC – Ethics test ● Take and pass Advanced test ● Take and pass HSA and/or COD (optional) ● Sign and print volunteer agreement (Form 13615) ● Submit Form 13615 to your instructor/leader for approval AZ Instructor Workshop TY137

8. TAX-AIDE Form 13615, Page 1 AZ Instructor Workshop TY138

9. TAX-AIDE Form 13615, Page 2 AZ Instructor Workshop TY139

10. TAX-AIDE AZ Instructor Workshop TY1310 Form 13615, Page 2 Request for CE credits to be sent to National Office for Approval. Do NOT send to SPEC.

11. TAX-AIDE QUESTIONS/COMMENTS? AZ Instructor Workshop TY1311

12. TAX-AIDE New Plastic Project Sent to all volunteers AZ Instructor Workshop TY1312

13. TAX-AIDE AZ Instructor Workshop TY1313

14. TAX-AIDE AZ Instructor Workshop TY1314

15. TAX-AIDE AZ Instructor Workshop TY1315

16. TAX-AIDE QUESTIONS/COMMENTS? AZ Instructor Workshop TY1316

17. TAX-AIDE Training Products Source: IRS Fact Sheet 8/13 AZ Instructor Workshop TY1317

18. TAX-AIDE Available IRS Training Products ● Pub 4480 VITA/TCE Link & Learn Training Kit Pub 4012, Volunteer Resource Guide Pub 4491W, Problems and Exercises (Evergreen) Pub 5051 (CD) Form 6744, Test/Retest AZ Instructor Workshop TY1318

19. TAX-AIDE Pub 5051 CD ● Pubs 4012, 4491-W, 4491, Form 6744 ● Pub 4942, HSA, COD Test ● Pub 4961, Volunteer Standards of Conduct – Ethics Training ● Pub 4965(PR) Puerto Rico Volunteer Test ● Pub 4704-FS, Foreign Student Test ● Form 13614-C EN & SP Intake/Interview and Quality Review Sheet AZ Instructor Workshop TY1319

20. TAX-AIDE Evergreen Products ● Pub 4491 Training Guide and Pub 4491W Problems and Exercises ● Evergreen products require minimal updates and will be updated every 2–3 yrs ● NOTE: Evergreen products should be maintained at the end of the filing season and used again the next filing season ● Pub 4491-X will contain updates to Pub 4491 and Pub 4491W AZ Instructor Workshop TY1320

21. TAX-AIDE QUESTIONS/COMMENTS? AZ Instructor Workshop TY1321

22. TAX-AIDE Federal Tax Law Changes 2013 AZ Instructor Workshop TY1322

23. TAX-AIDE Federal Tax Law Changes 2013 ● New provisions ● Indexing ● Extenders ● Form change ● Due Dates AZ Instructor Workshop TY1323

24. TAX-AIDE Medical Deduction Haircut ● Taxpayers can deduct amount of unreimbursed medical and dental expenses that exceeds 10% of AGI (was 7.5%) ● If 65 or older, threshold remains 7.5% AZ Instructor Workshop TY1324

25. TAX-AIDE Capital Gains Tax Rate ● New 20% rate for higher income taxpayers AZ Instructor Workshop TY1325

26. TAX-AIDE New Taxes ● Medicare tax on high incomes ● Net investment income tax for high income taxpayers ● Both apply if AGI exceeds $200,000 Single or HH $250,000 MFJ or QW $125,000 MFS ● Both out of scope AZ Instructor Workshop TY1326

27. TAX-AIDE Social Security Tax Rate ● Employee portion of social security tax returns to 6.2% (was 4.2% for 2011–2012) Applies to self-employment tax too  Full social security rate now 12.4%  Total S-E tax rate 15.3% AZ Instructor Workshop TY1327

28. TAX-AIDE Standard Deduction and Exemption Increases ● $6,100 – Single or MFS $7,600 – Single >65 or blind ● $8,950 – HH $10,150 – HH >65 or blind ● $12,200 – MFJ or QW $13,400 – MFJ, QW >65 or blind ● Exemptions increase to $3,900 AZ Instructor Workshop TY1328

29. TAX-AIDE Standard Mileage Rates 2013 ● 56.5¢ per mile – business miles ● 24¢ per mile – medical miles ● 14¢ per mile – charitable miles AZ Instructor Workshop TY1329

30. TAX-AIDE EIC Maximum Credits and Income ● $6,044 – three or more qualifying children ● $5,372 – two qualifying children ● $3,250 – one qualifying child ● $487 – no qualifying child ● $46,227 ($51,567 MFJ) 3 qualifying children ● $43,038 ($48,378 MFJ) 2 qualifying children ● $37,870 ($43,210 MFJ) 1 qualifying child ● $14,340 ($19,680 MFJ) no qualifying child AZ Instructor Workshop TY1330

31. TAX-AIDE Earned Income Credit AZ Instructor Workshop TY1331

32. TAX-AIDE Deductible Long-Term Care Premium Limits ● Qualified long-term care premiums includible as medical expense on Sch A $360 – Age 40 or under $680 – Age 41 to 50 $1,360 – Age 51 to 60 $3,640 – Age 61 to 70 $4,550 – Age 71 and over AZ Instructor Workshop TY1332

33. TAX-AIDE Other Indexing ● HSA Limits $3,250 self-only coverage $6,500 family coverage Both + $1,000 if age 55 or older ● Retirement savings credit income limits Max $29,500, $59,000 MFJ, $44,250 HH ● Max investment income for EIC $3,300 AZ Instructor Workshop TY1333

34. TAX-AIDE Other Indexing ● IRA contributions Max $5,500 ($6,500 if age 50 or older) Modified AGI limits when covered by employer plan ● Lifetime learning credit income limits ● Excludible savings bond interest – out of scope ● Foreign earned income exclusion AZ Instructor Workshop TY1334

35. TAX-AIDE Extended Provisions 2013 ● Tax-free distribution from IRAs to public charities for individuals age 70½ or older ● COD exclusion for principal residence ● Adjustment for educator classroom expenses up to $250 ● Adjustment for qualified tuition and fees AZ Instructor Workshop TY1335

36. TAX-AIDE Extended Provisions ● Premiums for mortgage insurance deductible as interest for qualified residence ● Deduction for state and local general sales taxes ● Nonbusiness energy property credit AZ Instructor Workshop TY1336

37. TAX-AIDE Form Changes ● Sch D new lines if all transactions on statement are Code A or D – basis reported to IRS with no adjustments ● Continue to enter all capital gains/losses on Capital Gains Worksheet in TaxWise TaxWise will carry to proper forms/lines AZ Instructor Workshop TY1337

38. TAX-AIDE Due Dates ● 2013 tax returns are due Tuesday, April 15, 2014 ● 2014 estimated payments due April 15, 2014 June 15, 2014 September 15, 2014 January 15, 2015 AZ Instructor Workshop TY1338

39. TAX-AIDE Form 8453 ● Where Form 8453 is required Can be scanned and sent with return or Copy must sent to Austin AND to the local SPEC office. Prepaid mail label are suppose to be provided AZ Instructor Workshop TY1339

40. TAX-AIDE Defense of Marriage Act (DOMA) ● AARP Tax-Aide will be required to prepare MFJ Federal tax returns for same sex married couples married in a state that recognizes same sex marriage. ● Separate AZ paper returns will be required for each taxpayer along with AZ Sch S. ● Further discussion in AZ Tax Law AZ Instructor Workshop TY1340

41. TAX-AIDE Identity Theft ● If unable to file return electronically because primary/secondary SSN was misused, attach Form 14039 to paper return and submit to IRS AZ Instructor Workshop TY1341

42. TAX-AIDE AZ Instructor Workshop TY1342

43. TAX-AIDE Notice CP01A ● IRS sent Notice CP01A to over 600,000 taxpayers last year ● CP01A contains Identity Protection PIN for use on current year return ● Enter IP PIN on Main Info Sheet in field located below where TP PINS entered AZ Instructor Workshop TY1343

44. TAX-AIDE Enter IP PIN on Main Info Sheet AZ Instructor Workshop TY1344

45. TAX-AIDE QUESTIONS/COMMENTS? AZ Instructor Workshop TY1345

46. TAX-AIDE AARP Tax-Aide Scope Changes AZ Instructor Workshop TY1346

47. TAX-AIDE AARP Tax-Aide Scope Changes ● SPEC has approved the following requested scope changes Sch C Expenses limit to $10,000 Wash Sales (Schedule D) reported on 1099-B or equivalent SEP/Simple IRA Distribution AZ Instructor Workshop TY1347

48. TAX-AIDE Other AARP Tax-Aide Changes ● We should try to enter bank information only from a check. If the taxpayer insists on using information they have, we can enter the bank information but the taxpayer must initial the return bank information and the counselor must enter the source of the information on the return. ● Name tags should include volunteer first name AND last initial only AZ Instructor Workshop TY1348

49. TAX-AIDE AARP Foundation Tax-Aide Scope 8-27-13 ● Referenced scope document has included the three scope changes ● Uploaded to ShareNet [Volunteer ShareNet][TaxLaw Training][Site and Volunteers] AZ Instructor Workshop TY1349

50. TAX-AIDE QUESTIONS/COMMENTS? AZ Instructor Workshop TY1350

51. TAX-AIDE TaxWise ® Tax Year 2013 Changes AZ Instructor Workshop TY1351

52. TAX-AIDE Initiatives for Tax Year 2013 ● Section 508 Compliant (requirement that all federal government electronic and information technology be accessible to people with disabilities) Allows the forms to be accessible by a JAWS (Job Access With Speech) compliant screen reader Other screen readers also supported AZ Instructor Workshop TY1352

53. TAX-AIDE 2013 Software Initiatives –TWO only Tax Year 2013 Changes ● Additional dependent statement linked from main information screen instead of from Form 1040 pg 1 ● Standalone Mortgage Interest Worksheet linked to Schedule A AZ Instructor Workshop TY1353

54. TAX-AIDE 2013 Software Initiatives –TWO only Tax Year 2013 Changes ● Added capability to include print sets in template publisher send settings (TWO) ● Added ability to search by dependent’s last name – TWD and TWO ● The latest news added to homepage AZ Instructor Workshop TY1354

55. TAX-AIDE 2013 Software Initiatives –TWD only Tax Year 2013 Changes ● Reminder: e-filing available for current and prior two tax years (2013, 2012 and 2011) ● Clear sent e-files – TWO and TWD Allows ERO to cancels e-file in limbo between tax site and MeF and then create and submit new e-file ● Cannot e-file amended returns – MeF cannot accept them AZ Instructor Workshop TY1355

56. TAX-AIDE CCH Small Firm Services TaxWise Updates AZ Instructor Workshop TY13 56 Questions? Comments…

57. TAX-AIDE Changes to Arizona Tax Law - 2013 AZ Instructor Workshop TY1357

58. TAX-AIDE Standard Deduction Indexed for Inflation - 2013 ● Single or married filing separate - $4,945 ● MFJ or HH - $9,883 AZ Instructor Workshop TY1358

59. TAX-AIDE Subtraction for Net Long-Term Capital Gains ● Beginning in 2013, you may take a subtraction from AZ gross income for a percentage of any net long-term capital gain included in AGI derived from assets acquired after 12/31/11 AZ Instructor Workshop TY1359

60. TAX-AIDE Subtraction for Long-Term Care Insurance Premiums ● Beginning in 2013, you may subtract the amount of qualifying premium costs for long-term care insurance as long as you are not claiming itemized deductions. AZ Instructor Workshop TY1360

61. TAX-AIDE Subtraction for AZ Long-Term Health Care Savings Accounts ● Beginning in 2013, you may subtract amounts you paid into long-term health care savings account established under AZ law AZ Instructor Workshop TY1361

62. TAX-AIDE Subtraction for 529 College Savings Plans Increases for 2013 ● Single or HH - $2,000 ● MFJ - $4,000 AZ Instructor Workshop TY1362

63. TAX-AIDE Credit for Contributions to Charities that Provide Assistance to the Working Poor ● Beginning in 2013, you are no longer required to itemize deductions in order to claim a credit for contribution make to a qualifying charitable organization ● Total maximum credit $400 for single taxpayers and $800 for married taxpayers ● See AZ Form 321 for more information AZ Instructor Workshop TY1363

64. TAX-AIDE Credit for Contribution to Private School Tuition ● For 2013, the amount of the allowable credit for contributions to private school tuition organizations adjusted for inflation. ● Single/HH - $517 maximum ● MFJ - $1,034 maximum ● See AZ Form 323 for more information AZ Instructor Workshop TY1364

65. TAX-AIDE Credit for Contributions Made to Certified School Tuition ● For 2013, amount of allowable credit for contributions to certified school tuition organizations adjusted for inflation ● Single/HH - $514 ● MFJ - $1,028 ● See AZ Form 348 for more information AZ Instructor Workshop TY1365

66. TAX-AIDE AZ Instructor Workshop TY1366

67. TAX-AIDE AZ Instructor Workshop TY1367

68. TAX-AIDE Some Taxpayers Receiving Balance Due Notices from AZ ● In 2009 Federal law allowed the first $2,400 of unemployment compensation to be tax free ● AZ decided in May 2010 to not conform to Federal law; therefore, unless taxpayers with unemployment filed an amended return, they owe AZ tax ● AZ is sending out notices to taxpayers affected by decision ● No action is required by AARP Tax-Aide. Taxpayer just has to pay amount due. AZ Instructor Workshop TY1368

69. TAX-AIDE 2013 AZ Income Tax Tables AZ Instructor Workshop TY1369

70. TAX-AIDE Defense Of Marriage Act - AZ ● AZ does not recognize same sex marriages and therefore we cannot prepare a MFJ AZ return. ● AARP does have to prepare a MFJ Federal return for a same sex marriage couple ● AZ Action for same sex marriage couple Prepare a single Federal return for each taxpayer, complete AZ return, decouple and paper file as state only and include AZ Sch S for both taxpayers. Prepare a joint Federal return without AZ and efile AZ Instructor Workshop TY1370

71. TAX-AIDE AZ Instructor Workshop TY1371

72. TAX-AIDE AZ Instructor Workshop TY1372

73. TAX-AIDE 2009 Unemployment ● In May 2010, after tax season, AZ decided not to recognize the Federal first $2400 in unemployment compensation as tax free ● Taxpayers affected by this are now receiving tax bills from AZ. ● No action required on our part. Just explain to taxpayers and indicate that they should pay. AZ Instructor Workshop TY1373

74. TAX-AIDE AZ Instructor Workshop TY1374

75. TAX-AIDE AZ Instructor Workshop TY1375

76. TAX-AIDE AZ Instructor Workshop TY1376

77. TAX-AIDE QUESTIONS/COMMENTS? AZ Instructor Workshop TY1377