1. Slippery Road Ahead Advanced Verification Issues Initial Forms Requested  Student’s 2005 federal tax return  Parent’s 2005 federal tax return, if applicable  Verification Worksheet  Untaxed Income Information CAUTION

2. Advanced Verification Issues Additional Forms Optional  W2s  Tax Schedules  Asset Information  State Tax Returns  What do you require?

3. TAX POLICE Reviewing the Tax Return  Did student and parent both claim student as exemption? (It’s a no-no)  Did student and/or parent use correct filing status? example: Married, filed separate, both as Head of Household

4. Simplified Needs Test… How to Determine that 1040 was required Taxable income is $100,000 or more or… Itemized deductions or… Reported income not allowed on 1040A or 1040EZ Taxable refunds 1040 Tax Line 10 Alimony 11 Business income or loss 12 Capital Gain or loss 13 Farm Income or loss 18 Other

5. Non-Filer? Filing Requirements for Most Taxpayers for 2005 Filing Status Age File if Gross Income at least Single Under 65 $8,200 65 or older $9,450 Married filing jointly Under 65 (both) $16,400 65 or older (one spouse) $17,400 65 or older (both) $18,400 Married filing separately Any Age $3,200 Head of Household Under 65 $10,500 65 or older $11,750 Qualifying Widow(er) Under 65 $13,200 w/dependent child 65 or older $14,200

6. Assets Required, Not Reported?  Interest earnings reported on 1040 line 8  Amount reported on 1040 line 12 implies business asset should have been reported  Amount reported on 1040 line 17 suggests property ownership & indicates an investment value  Amount reported on 1040 line 18 may imply a value that should have been reported as investment farm

7. Reviewing W2s Untaxed Income found in Box 12a-12d Codes: D,E,F,G,H,S,Q Untaxed Income found in Box 14 Code Q or ‘HOU’ May note housing allowance for Clergy