AARP Tax-Aide Counselor Reference Manual
This is the second set of changes to be applied to the 9/23/2009 version. This will then be version 3
Page ii Line 67
Cross out “First Time”
Page iii under Other Returns
Injured spouse is back in scope
Page 1 The TaxWise (UTS) phone number has been changed for us,
It is now 1-800-411-6391
Page 3 Form 8379 Injured spouse claim
This is now back in scope
Page 4 Add:
IRA distributions and Contributions requiring a Form 8606
Canadian Registered Retirement Plans
Mortgage Interest Credit Form 8396
Child Tax Credit for non-dependent child
Alternative Motor Vehicle Credit
LTC Insurance contract Distributions
Uncollected Social Security Tax
After “Foreclosure, Cancellation of debt, or Bankruptcy” Add:
Form 1099A, 1099C, 982
After “Distributions from Archer…..” Add:
Form 1099SA
After “AMT….” Add:
Form 6251, unless no AMT appears on return
After “Tax for Children with Investment Income” Add:
Form 8615
After “Reporting Childs Interest/Dividends on parents return” Add:
Form 8614
After “Qualified Adoption Expense” Add:
Form 8829
After “Installment Sale Income” Add:
Form 9465
Page 5 Under Delete all Returns
Change “TaxWise Explorer” to “Return Explorer”
Page 7 Under Pull down Menus, just below the third solid bullet
“View” should have been a solid bullet
Page 8 Under Screen Layout, Left Side, forms Tree
The check mark is missing from the parenthesis before Blue check mark
Page 12 organizing your work
The shortcut for Main Info is now “Main”
Page 15 under Filing Status second bullet – change first sentence to read
A married taxpayer, whose spouse and dependents reside outside of the US and who do not have social security numbers or ITIN’s, is married and must file as MFS or MFJ (requires ITINS and an election to be treated as a resident- out of scope)
Page 16 Under State Information, third bullet
Change “CA2 policy is to” to read “We should”
Page 16 Preparer’s use fields, second bullet
While Box 2 is no longer used for data retention, it may be used for local purposes or for Quality Reviewers initials.
Page 17 Under W2-Dollar Value Boxes Add:
For 2009,
TaxWise calculates the correct amounts for line 3, 4, 5, and 6 if entries are made on line 12 or line 7. The procedure shown in the second bullet is not required.
Page 22 Chart for K1
For K1 line 3 and 4a, the “Enter on Form column” should say “Sch D Pg 1”
Page 26 Under Completing the worksheet, Date acquired Third hollow bullet
Change “When “Inherit” and “Various” are…” to read “When Inherit” or “Various “is….”
Page 42 Under CA Sales Tax Rates Add
The blended tax rate for California in 2009 is 8.0034%
Page 43 Sch A – Line 7- Vehicle License Fee
Change to read “Line 8”
Change first line to read:
“Vehicle License Fee (VLF) should be listed under Other taxes with DMV in the type field.
Page 44 After Line 28- add:
Sch A Page 2 New Motor Vehicle Tax Worksheet
No entries will be made on this form. Enter the new motor vehicle sales tax on the Sales Tax worksheet Line 8 a, b, c
Page 46 Line 49 Education Credit, second bullet Hope/ AOTC Credit
At the end of the sentence, change “course materials” to “Books, supplies and computers”
Add: do not use Hope Credit in part ll of Form 8863
Page 47 Line 52 Residential Energy Credit
Mark second bullet as out-of scope
Page 50 Line 63 Making Work Pay - change to read as follows:
Taxpayer(s) who received Social Security, Railroad Retirement, Veterans Benefits, or SSI in Nov-Dec 2008 or Jan 2009 will have received the Economic Recovery Payment of $250. If their benefits started after that time they do not qualify for an ERP, however they may qualify for the Making Work Pay credit if they have earned income. (Note: This is not to be confused with the 2008/2009 Stimulus Payment Program.)
· For Individuals who received Social Security, Supplemental Security Income, Railroad Retirement, or Veterans Disability or Pension Benefits, click “Yes” on line 10 and enter $250 for each person receiving benefits. If they did not receive benefits, click “No” on line 10.
· If one or both spouses did not receive the Economic Recovery Payment and received a pension or annuity 1099 in 2009 for services performed as an employee of the U.S. government or any U.S. state or local government, click “Yes” on line 11 and enter $250 for each individual receiving a government pension but not the $250 economic recovery payment. If they did not receive a government pension, click “no” on line 11.
An individual who can be claimed as a dependent on another’s tax return is not entitled to a Making Work Pay Credit. Tax Wise will not allow the credit if they are not entitled to their own exemption.
Page 50 Line 66 Refundable Education Credit- first sentence
Change “may be refundable” to “will be refundable”
Cross out “if tax has been reduced to zero”
Page 50 Line 67 Home Buyers Credit – revise to read:
A credit of up to $8,000 is available to first time homebuyers ($6500 for repeat homebuyers who qualify) for a principal residence purchased in 2009 or before April 30 2010. Link to form 5405 and enter home address and acquisition date. Complete Part l and General and Part II Credit. If there is a Form 5405, the return cannot be filed electronically.
2008 homebuyers, who received the loan which must be repaid starting in 2010, will have to complete Part lll of Form 5405 if there has been a disposition of the property, including death of a joint owner or a divorce.
Page 54 Under “Deductions and Credits not Allowed by CA Add:
“Making Work Pay Credit”
“Homebuyers Credit” although California has their own credit- see next page.
Page 55 Child and Dependent Care Credit-Refundable (CA 3506)
Insert second bullet: Answer question, “Was care provided in California”
Change the former third bullet to read: Part ll The telephone number and location of the care provider is required to e-file the return
Page 57 Direct Deposit add:
Savings Bonds Direct Deposit
For Federal refunds, the client can now request a portion of their refund to buy up to $5,000 in U.S. Series I Savings Bonds
The amount requested must be a multiple of $50 and the bonds will be issued in the name of both taxpayers if this is a joint return
Bank account information must be available for deposit of any refund not used to purchase bonds A check cannot be issued
If the refund is an exact multiple of $50 and the entire refund is to be used to purchase bonds, the bond routing number can be entered on the main information sheet and 1040 page 2.
Use Form 8888 for deposit of part of the refund to Savings Bonds.
1a Enter a multiple of $50 on line 1a, but not more than $5000
1b Enter 043736881 as the routing number
1c Check the Savings box
1d Enter “BONDS” in the account number
2b, c, d Enter the account information for the remaining refund
Client can contact Treasury Retail Securities at 1-800-245-2804 to check status of their bonds
Page 62 Estimated CA Tax payments
First bullet- cross out See CA 540 instructions for details
Add fourth bullet-California estimates are distributed 30%-40%-0% and 30% to the four quarters. There will be no voucher for the third quarter.
Page 68 Injured Spouse Claim
This has been changed back to in-scope