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Entering Basic Taxpayer Information into TaxWise

Entering Basic Taxpayer Information into TaxWise. Pub 4012. Sample Intake/Interview Sheet. Sample Intake/Interview Sheet (cont’d). TaxWise Main Information Screen. Basic taxpayer & Spouse info. Main Information Screen Basic Information – TaxWise Tips. Enter names

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Entering Basic Taxpayer Information into TaxWise

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  1. Entering Basic Taxpayer Information into TaxWise Pub 4012

  2. Sample Intake/Interview Sheet

  3. Sample Intake/Interview Sheet(cont’d)

  4. TaxWise Main Information Screen Basic taxpayer & Spouse info

  5. Main Information ScreenBasic Information – TaxWise Tips • Enter names • Without punctuation marks (except for hyphen) • Use field help (?) to determine what is allowed • Last name of spouse is only needed if different from taxpayer • Primary SS # is automatically populated from info entered to start return • Spouse’s SS # must be entered • Enter zip code - TW populates city and state

  6. TaxWise Main Information Screen cont’d Age & occupation info Blind & disabled questions

  7. Main Information ScreenFiling Status – TaxWise Tips • Enter birth date as mmddyyyy (TW inserts slashes). Age is calculated • Check box for blind or disabled, if applicable. This is used to calculate Federal standard deduction & NJ exemptions • Enter date of death (if taxpayer died in 2014 or 2015 only - since using 2014 software) • TW will check box to indicate who is filing return for deceased taxpayer

  8. TaxWise Main Information Screen cont’d Presidential Election Campaign question Filing Status

  9. Main Information ScreenFiling Status – TaxWise Tips • Donation for Presidential Election Campaign does not impact client’s refund/balance due • Click on box to choose filing status • For Married Filing Single (MFS) • Enter spouse’s name, SS #, & answer questions • For Head of Household (HOH) • Only enter child’s name and SS # if child is not being claimed as a dependent • For QW, must enter year of death (2012 or 2013, since we are using 2014 software)

  10. TaxWise Main Information Screencont’d Personal Exemptions Check if taxpayer can be claimed on another person’s return Dependent Info

  11. Main Information ScreenExemptions – TaxWise Tips • TaxWise calculates first line of Exemptions based on previous data • Check box on lines 6A, B or C only if appropriate • Check line 6A if taxpayer can be claimed on another person’s return (e.g. – college student claimed on parents’ return)

  12. Main Information ScreenDependents – TaxWise Tips • List dependents from youngest to oldest • Enter 1-12 in M in HM (Months in Home) box • Use Code box drop-down menu to select relationship code • Check DC box (Child & Dependent Care) if there are eligible expenses • Always check EIC box for children • CTC box is automatically checked by TaxWise if child is eligible

  13. TaxWise Main Information Screencont’d State Info NJ forms populated in Forms Tree NJ state return automatically e-filed after Federal return is accepted

  14. TaxWise Main Information Screen cont’d Bank Account Info for Direct Deposit & Direct Debit* Enter after return is finished so taxpayer can decide if wanted

  15. Main Information Screen – TaxWise Tips • Bank Information Section • If Direct Deposit of refund or Direct Debit of amount due is desired, enter 9-digit routing number and account number as per client’s sample check • Do not use deposit slip info or handwritten information • Will also have to enter information a second time at bottom of Form 1040 Page 2 for verification purposes

  16. TaxWise Main Information Screen cont’d Taxpayer & Spouse PINs – any 5 digits Identity Theft PINs – 6 digits provided by IRS

  17. TaxWise NJ 1040 Page 1 Municipality Code Name &/or Address Change

  18. TaxWise Gubernatorial Elections Fund - NJ 1040 Page 2 Gubernatorial Elections Fund questions – different format than Presidential Election Campaign question

  19. Preparer Use Form Use drop-down menus or type in answers Foreign Language Question Disability Question Counselor initials Quality Reviewer Initials; Enter after QR complete

  20. Preparer Use Form – TaxWise Tips • Must answer language/disability questions on Lines 11/12 from info on Interview/Intake Sheet, Page 3 • Answers are used for grant and statistical purposes only • Enter preparer’s/quality reviewer’s initials on Lines 13/14 • Qualify reviewer’s initials should be entered after quality review is complete

  21. Entering Data into TaxWise for 1040 Page1 Pub 4012

  22. Entering Data into TaxWise for 1040 Page 1 • Income: • W-2 Wage & Tax Statement • 1099-INT Interest Statement • 1099-DIV Dividend Statement • 1099-R Distributions from Pensions, IRAs, etc. • 1099-G Unemployment Statement • SSA-1099 Social Security Statement • Adjustments: • Student loan interest deduction • All entries are made on appropriate forms & TaxWise transfers to 1040 Page 1

  23. W-2 Wage & Tax Statement • Employer issues to employee for tax year • Includes: • Employer identification info • Employee identification info • Wages earned • Taxes withheld • All info to be entered in TaxWise as shown on W-2 form

  24. W-2 Wage & Tax Statement cont’d • Each W-2 must be entered on a separate TaxWise screen • Click on + next to W-2 in Forms Tree to add extra W-2 screens • TaxWise transfers info onto appropriate 1040 lines

  25. W-2 Wages & Tax Statement Employer Info Federal Wage &Tax Info Employee Info Check Boxes State Wage & Tax Info NJ Specific Taxes

  26. TaxWise W-2 Screen Indicate whose W-2 Verify address on W-2 against Main Info address If red, verify Boxes 2, 4, 6 Check to override TWO calcu- lations In Boxes 3-6 or 16

  27. TaxWise W-2 Screen Enter EIN; TWO may populate employer’s name & address Enter Boxes 1 & 2; TWO calculates Boxes 3-6 Use field help (?) to see what special characters are allowed Verify address on W-2 Enter zip code; TWO populates city & state If red, verify Boxes 2, 4, 6 TWO recalculates Boxes 3-6 if entry in Box 7

  28. TaxWise W-2 Screen TWO recalculates Boxes 3-6 if necessary based on Box 12 TWO recalculates Boxes 3-6 if Entries in Boxes 7 or 14 Verify address on W-2 Be sure amounts in Box 14 are next to proper label Check box at top of W-2 screen if state wages need to be overridden Be sure amounts are next to proper label If red, verify Boxes 2, 4, 6

  29. Interest & Dividends Statements1099-INT & 1099-DIV • Issued by financial institutions for interest &/or dividends received • Enter info from these forms in TaxWise on Interest Stmt or Dividend Stmt screens (under Sch B in tree) • All 1099-INTs can be entered together on 1 TaxWise Interest Stmt; all 1099-DIVs can be entered on 1 TaxWise Dividend Stmt • TaxWise transfers info to Sch B Interest & Ordinary Dividends & then to appropriate lines on 1040

  30. 1099-INT Interest Statement Interest Income Early Withdrawal Penalty Payer Info Federal Income Tax Withheld Payee Info

  31. TaxWise Schedule B Interest Statement Screen All 1099-INTs go on one screen (unlike W-2s or 1099-Rs on multiple screens); no blank lines between entries

  32. 1099-DIV Dividend Statement Ordinary Dividends Payer Info Qualified Dividends Capital Gains Distribution Payee Info Federal Taxes Withheld

  33. TaxWise Schedule B Dividend Statement Screen All 1099-DIVs go on one screen (unlike W-2s or 1099-Rs on multiple screens;) no blank lines between entries

  34. Retirement Income1099-R • Distribution from pension, IRA, annuities, etc. • Enter info on TaxWise 1099-R screen • Each 1099-R must be entered on a separate TaxWise screen • Click on “+” next to 1099-R in Forms Tree to add extra 1099-R screens • TaxWise transfers info onto appropriate 1040 lines

  35. 1099-R Retirement Income Gross Distribution Taxable Amount Payer Info Payee Info Checked if IRA Distribution Codes (on back or in Help)

  36. TaxWise 1099-R Screen Verify address on W-2 against Main Info address Enter Payer ID; TWO may populate payer’s name & address

  37. TaxWise 1099-R Screen cont’d 1099-R code Check if IRA distribution

  38. Unemployment Compensation1099-G • Unemployment compensation received from NJ government • Enter info on TaxWise 1099-G screen • TaxWise transfers info entered onto appropriate 1040 lines

  39. TaxWise 1099-G Unemployment Amount Payer Info Payee Info Federal Tax Withheld

  40. TaxWise 1099-G Screen Unemployment benefits Federal tax withheld

  41. Social SecuritySSA-1099 • Enter info from SSA-1099 onto TaxWise 1040 Worksheet 1 screen • Includes: • 2014 net benefits (from Box 5) • Medicare Parts B, C & D (from Description box) • TaxWise transfers to Schedule A Detail Medical Expenses • Federal income taxes withheld (from Box 6)

  42. SSA-1099 Medicare Part B Box 5 Amount Medicare Part D If more than one Medicare premium, link to scratch pad to enter all Federal Tax Withheld

  43. TaxWise 1040 Worksheet 1 Screen(for Social Security) From SSA-1099 Box 5 From Medicare scratch pad

  44. TaxWise Scratch Pad for Medical Expenses Description should reference where scratch pad links to Medicare Premiums for Parts B & D

  45. Student Loan Interest Deduction • Can deduct qualified student loan interest as an adjustment to income • On 1040 Line 33 • Enter on 1040 Worksheet 2 in TaxWise • Probably not in the Forms Tree – use Add button at top of Tree or link from 1040 Line 33

  46. TaxWise 1040 Worksheet 2 Screen(for Student Loan Interest) Student Loan Interest

  47. Other Sources of Income Not Covered in Familiarization • Examples of other sources of income we might see but not covered in familiarization: • Sale of stocks and bonds • Sale of home • Partnership income on Schedule K-1 • Gambling income • Income tax and property tax refunds • Alimony • Business income

  48. Entering Data into TaxWise for 1040 Page2 Pub 4012

  49. Form 1040 Page 2 Taxes & Credits • Start with AGI • Deduct itemized or standard deductions • Deduct personal exemptions • Arrive at taxable income • Alternative Minimum Tax (Out of Scope) • Apply non-refundable tax credits • Add other taxes • Bottom line is Total Tax

  50. Standard vs. Itemized Deductions • Everyone is allowed a standard deduction • TaxWise determines amount of standard deduction depending on: • Filing status • If taxpayer is age 65 and older • If taxpayer is blind • For some, itemized deductions can be more beneficial than standard deduction

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