Credits
Name one of the two credits intended to help offset the cost of higher education.
American Opportunity Credit or Lifetime Learning Credit
Can a client take both a standard and itemized deduction?
NO!
What is the form used to report social security income?
1099-SSA
How is an e-file pin assigned to a client who does not already have one?
1 + last four digits of their SSN
Provide an example of unearned income.
Retirement, social security, unemployment, scholarships, capital gains/losses, or interest/dividends.
What is the name of the credit intended to help cover the costs of babysitting or daycare for working parents?
Child and Dependent Care Credit
What are the least beneficial filing statuses (smallest standard deductions)? hint: there are two
Single and Married Filing Separately
What is the name of the form given to a client who wishes to mail their tax liability payment to the IRS (rather than a direct withdrawal)?
1040-V Federal Payment Voucher
What should a volunteer be checking for when they go over a client's intake form with them?
The volunteer must talk through the intake questions with the client and be sure to change all “Unsure” answers to yes or no.
What is the name of the IRS VITA/TCE Volunteer Resource Guide?
PUB 4012!!
Explain the difference between a refundable and nonrefundable credit.
A nonrefundable tax credit can only reduce a tax liability to zero. A refundable tax credit results in a tax refund if the amount owed is below zero.
What are the most beneficial filing statuses (largest standard deductions)? - hint: there are two
Married Filing Jointly and Qualifying Widower/Surviving Spouse
There are three 1095 forms (1095-A, 1095-B, and 1095-C) used to report health insurance coverage, but we only have to file one of them. Which is it?
1095-A.
Form 1095-A is used to report information about individuals who enroll in a qualified health plan through the Health Insurance Marketplace (Obamacare).
Form 1095-C allows them to take the premium tax credit.
What must the volunteer do at the end of the return, after inputting all of the client's information?
The volunteer says to the client: “Your federal refund/liability is X and your state refund/liability is Y, do we have your consent to file this return?”
The client must provide an e-signature in TaxSlayer to confirm their consent.
For how many years after a spouse's death can someone be considered a qualifying widower/surviving spouse?
Two years, and the client can't have remarried before the end of the ensuing tax year.
What are the requirements for a dependent to be considered a "qualifying child" for the purposes of receiving the Child Tax Credit?
To be a qualifying child for the 2022 tax year, a dependent generally must:
Name three expenses that qualify as itemized deductions.
Potential answers:
What are the two forms that must be filled out in order to report self-employment income?
Form 1099-NEC (formerly 1099-MISC before 2020); income from the form 1099-NEC must then be carried to a Schedule C.
What are the four options that a client has for transmitting their return?
Paper file - direct withdrawal/deposit
E-file - direct withdrawal/deposit
Paper file - paper (mail) check
E-file - paper (mail) check
What is the "support test" for determining if someone is a dependent?
The client must generally provide more than half of the person's total support during the calendar year.
Who qualifies for the Earned Income Tax Credit?
Low-to moderate-income workers with qualifying children if:
What was the standard deduction for someone filing as Single in 2022?
$12,950
What is the form used to report scholarships, fellowships, and other educational stipends, and what counts as a qualifying educational expense on this form?
Tuition, fees and other related expenses count as qualifying educational expenses. For AOTC only, expenses for books, supplies and equipment the student needs for a course of study are included in qualified education expenses.
The following are not qualified education expenses:
If the scholarship is greater than qualified education expenses, the net difference must be reported as scholarship income.
What are the options for a client who owes money?
They can set up a payment plan, set the direct withdrawal to a later date when they have the funds (before tax day), pay by check at a later date when they have the funds (before tax day), or request an extension from the IRS.
Walk me through the basic tax equation -- i.e., how you get from a client's AGI to the amount of taxes they owe or the refund they're due.
Total Income - Adjustments
=Adjusted Gross Income (AGI)
AGI - Deductions
=Taxable Income
Taxable Income x Tax Rate
= Gross Tax
Gross Tax - Tax Credits
= Taxes Owed