TRAINING TOPICS - 2010

1. TRAINING TOPICS - 2010 Bob Eslinger – PRTA Janelle Riedl - TRS

2. What’s New Unchanged provisions MeF TW SW Enhancements Publications Training Guide Cod & HSA Extranet Training Certification Taking The Test Training Outline

3. IRS In-scope Changes for VITA-TCE • Schedule C – up to $10,000 expenses – same rules as Schedule CEZ (no losses, no employees, no inventory) • Schedule K-1 - royalties • Two new “on-line” training modules and tests: • HSA – Health Savings Accounts • COD – Cancellation of Debt

4. Economic Recovery Payment • Some SS recipients will receive $250 ERP in 2010 • If did not receive in 2009 when first eligible, • i.e. social security, ssi, railroad retirement, or veterans disability benefits in November 2008, December 2008, or January 2009 • Any Making Work Pay Credit will be reduced in 2010 by this payment

5. Estate Tax, Basis & Holding Period Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) repealed estate tax after December 31, 2009 and before January 1, 2011 Basis of assets inherited from decedent dying in 2010 is the lesser of the decedent’s adjusted basis or fair market value Basis is treated as a gift Automatic “more than one year” or long term holding period does not apply Date of acquisition will be same as decedents’

7. ARRA Provisions in 2010 First time homebuyer credit extended closing on purchase of home to September 30, 2010, if purchased before April 30, 2010; eligible for up to $8,000 credit New motor vehicle purchased in 2009 (after Feb 16, 2009 and before Jan 1, 2010) but did not pay sales taxes until 2010 – are eligible to deduct the amount paid in 2010

8. New or Unchanged Provisions in 2010 Investment income for children remains at $1900; Standard deduction for Head of Household increases to $8400 (from $8350) – all other standard deductions remain the same: Single - $5,700 Joint - $11,400 HOH - $8,400 Exemption amount remains the same in 2010 - $3,650; Standard Mileage Rates – for 2010 Business – 50 cents per mile Medical and moving – 16.5 cents per mile Charity – 14 cents per mile

9. Earned Income Credit Amount of credit increases in 2010: One qualifying child – maximum $3050 Two qualifying children – maximum $5036 Three qualifying children – maximum $5666 No qualifying children – maximum $457 Earned income amount increases in 2010: $35,535 (joint $40,545) One qualifying child $40,363 (joint $45,373) Two qualifying children $43,352 (joint $48,362) Three qualifying children $13,460 (joint $18,470) No qualifying children

10. Other changes or items Refund options for purchase of Savings Bonds For 2010, in addition to direct deposits can use refund to purchase savings bonds Can purchase up to three I bonds registrations, Purchase for themselves, beneficiaries, or co-owners, or other persons, other than themselves; Use Form 8888

11. Expiring Tax Benefits(subject to possible extenders) Waiver of Minimum Required Distributions from IRAs’ and defined benefit plans; Exclusion of $2400 of unemployment compensation from income; Tax free distributions to charity from IRA; Deduction of educator’s expenses; Tuition and Fees Deduction from AGI; Extra $3000 IRA contribution for bankrupt companies; Increase of Standard Deduction for real estate taxes and disaster losses; Increase in Itemized Deduction or Standard Deduction for sales taxes of purchase of new motor vehicle; Increase in Itemized Deduction for state and local sales taxes; Certain tax benefits for Midwestern disaster areas

12. Modernized efile (MeF) Modernized efile is a replacement system for the processing of efiles the by the IRS. TaxWise will begin phasing in MeF in the 2011 filing season. This IRS process improvement will make many of your Acknowledgements almost immediate, and provide with better reject explanations.

13. Modernized efile (MeF) IRS plans to rollout 1040 MeF in three-phases over three years: The first phase of 1040 MeF occurred in February 2010 and includes Form 1040, and 21 1040-related forms The second phase of 1040 MeF occurs in January 2011 with hardware and code optimization. The third phase of 1040 MeF occurs in January 2012 and include the remaining forms for individual e-filing

14. Modernized efile (MeF)

15. TaxWise 2010 Enhancements Three additional Preparer Use Fields are added to the Main Information Sheet in both Desktop and TWO. One of which will be used for our national reporting of QR. Override can be disabled at preparer level Interactive Interview. The preparer can toggle back and forth between the Interview and the Tax Forms. CCH claims the Modem Communication problems are resolved. Desktop Changes

16. TaxWise 2010 Enhancements Contact Sensitive Help will be available Time-out Reminder 5 min. before shut down New User Roles added - Reviewer, E-file Manager New Hot Keys for… Move Curser to next Entry Insert & Remove Rows - Statements & Worksheets User defined Printing of State Forms Custom Templates for tax form Defaults TWO Changes

17. 2010 VITA/TCE Quality Statistical Sample (QSS) Review Comparisons

18. Quality Form 13614-C Intake/Interview and Review Sheet Updated • Added an IRS email address and toll free number if problems are identified at the site. • Volunteers will check only one box on the Quality Review Checklist (Section C). • Section B is not required if Part II, Question 2 is blank • A column for taxpayers to check “unsure” in Parts III, IV, and V • Form numbers added where applicable

22. Training Publications Tax Year 2010 Training Products updated by SPEC/Partner Teams: • Testing Materials - Printed and Link & Learn Taxes version - Publication 4189 & Form 6744 • Student Workbook - Comprehensive Problems & Exercises Workbook - Publication 4491-W (Development and Review Team) • e-file Administrator & the Volunteer Resource Guides - Publications 3189 and 4012 (TaxWise Yellow & Blue Tabs) • Training Products Quality Review – Publications 4491 and 4012 (Tax Law White Tabs) • “Optional” Online Module Training and Certification Test – Health Savings Accounts (HSAs) and Cancellation of Debt (COD) AARP Tax-Aide played a significant role on the above Teams.

29. HSAs and CODs An Introduction to Health Savings Accounts and Cancellation of Debt

30. NEW THIS YEAR This year new online courses on HSAs and/or CODs are available. The courses are available online at Link & Learn and are optional. It is not required, and is not referenced in the Basic, Intermediate or Advanced tests.

31. Certification Volunteers who are interested in being certified or qualified to do a HSA and/or a COD returns will be allowed to go on-line to take the course. DCs or LCs will determine if there is a need for counselors at their site to be certified in HSA or COD returns. A minimum of two counselors per site will be required.

32. How will it work? • New online courses on Health Savings Accounts (HSAs) and/or Cancellation of Debt (CODs) are available. • The courses are available online in Link & Learn and is optional. • Volunteers who are interested need to talk with their site coordinator to determine if there is a need for HSA or COD, or both, certification.

33. Who Can Certify? • TaxAide volunteers with Advanced certification may complete certification in Link & Learn for each module separately. • Those who are certified will be able to assist taxpayers with HSA or COD, or both, issues – these will be within scope of the Tax-Aide program.

34. Why Is This Added? More taxpayers coming into TaxAide sites who pay medical expenses through health saving accounts (HSAs). COD includes Mortgage Foreclosures and Debt Cancellation, including cancellation of non-business credit card debt – more taxpayers have been faced with these issues in past two years.

35. http://www.aarp.org/tavolunteers/

40. Counselor Certification • Counselors required to complete Basic, Intermediate & Advanced with 80% accuracy • All volunteers must attend portion of training on Policies and Procedures • Volunteer Agreement F-13645 must be filled in and signed by volunteer • Recommend counselors complete at least 4 problems from Pub 4491W

41. Taking the Test • Recommend counselor take test on Link & Learn. Be sure to fill out form 13645 on L&L • Can take paper test (Pub 6744) and submit answer sheet to instructor • Recommend using Practice Lab for parts of test requiring return preparation.

42. Use of Link & Learn and Practice Lab for Taking the Test and Certification • Returning counselors may take the test using Link and Learn (L&L) • It is recommended that Practice Lab be used to support test and for practice • A certificate of completion of applicable test segments (Basic, Intermediate & Advanced plus optional COD/HSA) and the Volunteer Agreement can be printed and given to their instructor • L&L, Practice Lab and the test are on-line • Counselors will need to have access to a computer with high speed internet connection and print capability to use L&L and Practice Lab • Public computers (such as library computers) are acceptable since access is password protected • The test can only be taken twice per segment

44. Advantages • L&L modules can be used to learn the new tax law or brush up • Using Practice Lab will provide experience with Taxwise 2010 for federal returns • Using L&L will provide more immediate feedback • Instructors will not have to grade tests

45. Link & Learn Taxes and the Practice Lab How is Link & Learn accessed? • Use Internet Explorer • Go to www.irs.gov, Keyword/Search: “Link & Learn” • Choose certification level (Basic, Intermediate, Advanced, Military, International) • Begin online learning!!

50. Access Link & Learn Practice Lab