2. Level 3, 4, 5 Returns

3. O Scholarships O 1099-MISC O SSA-1099

4. Scholarships O Form 1098-T O Qualified tuition and related expenses billed by school O Scholarships and grants received by taxpayer O If scholarships or grants exceed qualified educational costs, some of the grant or scholarship money may be taxable

5. 1098-T O Commonly used boxes O Box 1: Payments received for qualified tuition and related expenses O Box 2: Amounts billed for qualified tuition and related expenses O Schools will use either Box 1 or Box 2 O Box 5: Scholarships and Grants O May reduce the amount of education credit taxpayers can claim for the year

6. Qualified Tuition and Related Expenses on 1098-T O Undergraduate Tuition O Graduate Tuition O Undergraduate student Activity Fees O Graduate Student Activity Fees O Course materials and reader fees O All financial aid

7. 1099-MISC O Self-employed individuals are independent contracts, not employes O For business owned by just one person, self- employment income, expenses, and profit or loss are reported on Form 1040, Schedule C. O 1099-MISC is required when the payment form any one payer is $600 or more for the calendar year

8. 1099-MISC O Example: http://apps.irs.gov/app/understandingTaxe s/hows/mod14/sim_mod14b_01.jsp http://apps.irs.gov/app/understandingTaxe s/hows/mod14/sim_mod14b_01.jsp

9. SSA-1099 O Social Security Benefits O Payments made under Title II of Social Security Act O Include old age (monthly retirement), survivor, and disability insurance benefits O Generally, if social security benefits are the only sources of income, they are not taxable O However, if taxpayer is Married Filing Separately, 85% of the benefits will be taxable

10. SSA-1099 O The amount from Box 5 of the form SSA- 1099 is used to calculate the taxable portion of the benefits

11. Adjustments to Income O Tax deductions that are not itemized O Adjust (reduce) your income to arrive at your adjusted gross income

12. Adjustments to Income O Ask taxpayer if they O Had any expenses as an educator O Received income from self-employment O Paid a penalty for early withdrawal of savings O Made contributions to a traditional IRA O Paid student loan interest O Paid college tuition

14. Credits O Sum deducted from the total amount a taxpayer owes O Dollar-for-dollar reduction of tax O Important credits O Education credits O Child Tax Credit O Earned Income Tax Credit********

15. Education Credits O Two kinds of education credits O American Opportunity Credit O Lifetime Learning Credit O Taxpayers can not claim both credits

16. Education Credits O Eligibility O If taxpayer claims an exemption on the tax return for a dependent who is an eligible student, then only the taxpayer can claim an education credit based on the student’s expenses. The student cannot claim the credit. O If taxpayer does not claim an exemption for a dependent who is an eligible student, then the student can claim an education credit but the taxpayer can not.

17. Education Credits O Income Requirements O Single/Head of Household/Qualifying Widow(er) O Can not claim education credit if AGI is $90,000 or more; credit will be reduced if AGI is $60,000 or more O Married Filing Jointly O Can not claim education credit if AGI is $180,000 or more; credit will be reduced if AGI is $120,000 or more

18. Education Credits O American Opportunity Credit O Credit will be up to $2500 based on qualified tuition and related expenses paid for each eligible student O To be eligible, taxpayer must be O Enrolled in a program that leads to a degree O Taking at least one-half of the required workload for the course of study for at least one academic period O Enrolled in the first four years of postsecondary education O Free of any felony conviction for possessing or distributing a controlled substance O 40% of credit will be refundable

19. Education Credits O Lifetime Learning Credit O Claim credit of up to $2000 based on qualified tuition and related expenses paid for all eligible students enrolled O Education expenses that qualify are for courses taken as part of a postsecondary degree program or taken to improve or acquire job skills

20. Child Tax Credit O Two tax credits for children O Child Tax Credit O Additional Child Tax Credit

21. Child Tax Credit O Allows taxpayers to claim a tax credit of up to $1000 per qualifying child O Eligibility requirements: O For qualifying child: O Under age 17 at the end of tax year O Citizen of US O Doesn’t provide over half of own support O Lived with taxpayer for more than half of year O Be taxpayer’s son, daughter, brother, sister, etc

22. Child Tax Credit O Taxpayers must provide the name and SSN of each qualifying child on their tax return O Limitations O Amount of taxpayer’s child tax credit depends on the taxpayer’s O Tax Liability O For example, if tax liability is 0, then the credit will be 0 O Modified AGI and filing status

23. Child Tax Credit O Limits O If married filing jointly, must have AGI less than $110,000 O If head of household/single/qualifying widow(er), must have AGI less than $75,000 O If married filing separately, must have AGI less than $55,000

24. Additional Child Tax Credit O When a taxpayer’s child tax credit is more than their tax liability, they may be eligible to claim an additional child tax credit as well as the child tax credit O Also a tax credit of up to $1000 per qualifying child O Same requirements for qualifying child as for the child tax credit

25. Additional Child Tax Credit O The credit will be whichever is lower O 15% of the taxpayers earned income that is over $3000 O The amount of unused child tax credit (caused when tax liability is less than allowed credit) O Can claim up to $1000 O Taxpayers must earn more than $3000 and have a tax liability that is less than their allowable child tax credit

26. Earned Income Tax Credit O Tax credit for certain people who work and whose earned income and adjusted gross income (total income reduced by certain amounts) are under a specified limit

27. EITC O For 2011, earned income and AGI income had to be less than O $43,998 ($49,078 if married filing jointly) with 3 or more qualifying children O $40,964 ($46,044 if married filing jointly) with 2 qualifying children O $36,052 ($41,132 if married filing jointly) with 1 qualifying child O $13,660 ($18,740 if married filing jointly) with no children

28. EITC O To claim EITC taxpayers must O Have gross income less than the listed amounts O Valid SSN number O Cannot be married filing separate O Must be a U.S. citizen O Must have earned income O Investment income must be less than $3150 O Cannot be the qualifying child of another person

29. EITC O http://apps.irs.gov/app/understandingTaxe s/hows/tax_tutorials/mod11/tt_mod11_06. jsp

30. 1040 O http://www.nytimes.com/interactive/2012/ 02/12/business/yourtaxes/2011-taxes- 1040.html?src=tp http://www.nytimes.com/interactive/2012/ 02/12/business/yourtaxes/2011-taxes- 1040.html?src=tp