you can do it manual

8/3/2019 You Can Do It Manual

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THE 2012 VOLUNTEER ANSWER GUIDE

You Can Do It!

www.economicprogress.org

C HIC AGO (MAIN OF F IC E)

29 E. Madison, Suite 900

Chicago, IL 60602

(312) 252-0280

S PR INGF IEL D

687 E. Linton

Springfield, IL 62703

(217) 753-3272


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CONTENTS

General Information 3

2012 Tax Sites Locations and Hours 4

Financial Services at CEP Sites 6

Tax Clinic Referral 6

Federal Refund Timeline 7

Financial Services Information 9

Savings Options 10

Direct Deposit Options 10

FAFSA Services 11

Savings Bond Basics 11

Tax Preparation Information 18

Seven Basic Steps of Tax Preparation 19

Common Tax Forms 20

All Those Kids 22

All Those Kids-Part 2 24

Qualifying Relatives 26

Income Chart 28

Child Tax Credit & Additional Child Tax Credit 30

Child & Dependent Care Credit 31

Benefits Related to Education 32

Printing 34

Printing the Client Letter in Spanish 35

ITIN Tax Returns 35

Notes & Additional Information 36

You Can Do It! is a work product of the Center for Economic Progress and

cannot be used, reproduced or distributed without the written consent of the

Center for Economic Progress, 29 E. Madison, Suite 900, Chicago, IL 60602.

Contact [email protected] for more information.

2011 Center for Economic Progress

Site Assistant Information 12

Site Assistant Responsibilities

Client Intake 14

Sorting

Requesting Donations

15

17

13


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General InormatIon


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vOLUNTEER ANSWER GUIDE 2012 // GENERAL INFORMATION

2012 TAX SITES LOCATIONS AND HOURS

GENERAL INFORMATION // vOLUNTEER ANSWER GUIDE 2012

4 5

TBD TBD


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FEDERAL REFUND TIMELINE

Clients who fle And receive reund by Can expect their reund in

Electronically Direct deposit 2 weeks

Electronically Paper check 34 weeks

On paper (by mail) Direct deposit 56 weeks

On paper (by mail) Paper check 68 weeks

Note: This is a ery general guideline. Many actors determine when a client

receies a reund: USPS, IRS delays, time o fling and rejects due to errors on the

return.

Clients can check on their reund by going to www.irs.go and clicking on the

Wheres My Reund? link, or calling (800) 829-1954.

Prior year and amended returns are subject to longer time rames.

Clients can help by double checking ALL inormation on their returnnames, social

security numbers, birthdates, and bank inormation.

7

vOLUNTEER ANSWER GUIDE 2012 // GENERAL INFORMATION

FINANCIAL SERVICES AT CEP SITES

Clients should always be encouraged to use direct deposit or their tax reund.

Direct deposit is more secure than receiing a paper check and the reund arries

aster. Clients without bank accounts should be reerred to the on-site bank partner

to open an account. I a client is interested in receiing the reund on a prepaid

debit card, the tax preparer can open a prepaid debit card rom the TaxWise main

inormation screen.

I clients are interested in additional fnancial serices, reer them to our client line:

312.630.0248. Our sta can help with FAFSA completion, as well as understanding

the fnancial aid application process and aid oers/awards.

TAX CLINIC REFERRAL

CEPs tax clinic represents clients with tax disputes beore the IRS and Illinois

Department o Reenue (IDR). The clinic assists clients with the ollowing types o

matters:

Audits

Garnishments: bank, wage and social security leies

1099-A and 1099-C cancellation o indebtedness issues

Payment arrangements/debt negotiation

Pre-2008 original returns and 1040Xs (subject to sta aailability)

The Clinic does not assist clients with the ollowing types o matters:

Property tax

IDR matters only (a ederal matter must exist as well)

Business entities, including S Corporations

Disputes with paid preparers oer rapid reunds

To reer a client to the Tax Clinic:

Complete a clinic reerral orm and gie it to your site manager. Alternatiely, the

client can leae a message on the clinic oicemail line: (312) 630-0241.

The client can expect to be contacted within fe business days o the clinics

receipt o the reerral orm. Depending on method o deliery this could be

between one and 10 days ater you complete the orm. Calls will be returned as

soon as practicable.

GENERAL INFORMATION // vOLUNTEER ANSWER GUIDE 2012

6


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InancIal ServIceS InormatIon


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vOLUNTEER ANSWER GUIDE 2012 // FINANCIAL SERVICES INFORMATION

FAFSA SERVICES

At most tax sites, there will be an Illinois Student Assistance Commission (ISAC)

member or olunteer tax preparer that is trained to assist clients with fnancial

aid applications. Please reer interested clients to FAFSA olunteers. I no trained

olunteer or ISAC member is present, reer the client to our FAFSA help line:

312.630.0248 or [email protected].

I you would like to prepare fnancial aid applications in addition to preparing tax

returns, complete the FAFSA Assistance trainings online or contact

volunteer Serices at [email protected] or 312.630.0288.

FAFSA preparers: Please take a ew minutes with each FAFSA client to complete

the tracking surey at www.economicprogress.org/surey.

1. Purpose: Inorm the client about the purpose o the surey.

Script: We are asking that you complete this survey so that we can better

serve our clients. This will help us know i we are reaching out to people

who need our services and will also help us improve our services.

2. Confdentiality and Data Security: Assure your client that his/her surey

responses will be confdential and that all data will be held in a secure

database.

Script: All your answers will be completely confdential. Your name will

never be used or associated with any data. Also, the survey data will be

held in a secure database to which only the individuals managing the data

will have access.

SAVINGS BOND BASICS

1. Low-risk and backed by the U.S. Treasury

2. Does not require a bank account

3. No ees

4. Easily cashed at any bank

5. Able to purchase the bond directly rom the tax return on orm 8888

6. Bonds mailed as paper bond certifcates to the address on the tax return

7. May take up to three weeks or the tax fler to receie the bond

FINANCIAL SERVICES INFORMATION // vOLUNTEER ANSWER GUIDE 2012

SAVINGS OPTIONS

Challenge Product options Feature

Small amount to

sae

Credit history

problems

Suspicious o

fnancial institutions

No bank account

Wary o saing/not

sure i they can sae

Saings account;

saings bond

Saings account;

saings bond

Saings bond

Saings bond

Saings account

Only need $50 minimum or

bond

No credit screening (e.g. no

ChexSystem); positie usage o

saings account can build credit

Goernment backed; no ees

No bank account required

Begins a saings habit but

money can be accessed

immediately in case o

emergency

DIRECT DEPOSIT OPTIONS*

Challenge Product options Feature

Credit history

problems

Suspicious o

fnancial institutions

Needs quick access

to tax reund

Check cashing ees

Saings account;

prepaid debit card

Prepaid debit card

Saings or checking

account; prepaid

debit card

Saings or checking

account; prepaid

debit card

No credit screening (e.g. no

ChexSystem); positie usage o

saings account can build credit

No bank account required;

operates more like a credit card

than bank account

I return is electronically fled, it

only takes about 7-10 days

Allows deposits and access to

cash without ees

*First priority is to get an unbanked client oer to talk with the on-site fnancial partner to see i they hae an account

that will meet their needs.

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SITE ASSISTANT RESPONSIBILITIES

Site assistants are extremely important in keeping the site running efciently. There

are a ariety o roles that site assistants fll; please consult with your site manager

to determine the best ways to help out.

Beginning/End o Shit

Post/take down income guidelines, site signs, and IRS posters

Prepare/fle client sign-in sheet and set up/clean up intake area

Assist with site setup/cleanup, including laptops at laptop sites

Throughout Shit

Greeting

Welcome each client, notiy them o income guidelines, ask them to sign in

and give them intake sheets to complete while they wait.

Intake

As clients complete the intake sheet, screen them one by one, ensuring

that they meet income guidelines and that all tax documents and supporting

inormation are in their older. Discuss available fnancial services such as

fnancial products, savings options and FAFSA preparation.

Sorting

Sort completed returns, get client signatures on required documents and

give client their copies. Tell them when and how to expect their reund and

address any questions they may have beore leaving. Inquire about clients

interest in making a monetary donation to CEP.

Translating

I profcient in another language, assist with translation as needed.

Filing

File completed client olders according to social security number.

Shredding

Shred all extra print jobs, unneeded copies o documents and erroneous tax

returns.

Child care

Keep the site calm by entertaining clients children. Share crayons and color-

ing pages as well as picture books. Invite children to draw a picture or the

volunteer completing their amilys return.

13

vOLUNTEER ANSWER GUIDE 2012 // SITE ASSISTANT INFORMATION

SIte aSSIStant InormatIon


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SORTING

Hae the client reiew the printout o the Main Inormation Sheet and

double check names, SSN, addresses and dates o birth or all persons on

the return.

Double check direct deposit inormation or accuracy (1040, pg 2)

Ensure Use & Disclosure Form is signed by the client on ront and back

when necessary.

The exterior o the client older should be flled out completely, including

indication o a signed 8879 or e-fled tax returns.

Sorting Current Year Returns

In the older, in this order:

1 signed (ront and back) Use & Disclosure Form (all returns)

Intake Sheet (Form 13614-C) and Supplemental Intake Sheet (all returns)

1 copy o each W-2, 1099 and any other supporting documents (all returns)

Main Inormation Sheet, all W-2 summaries or other printed worksheets (all

returns)

To the client, in this order:

Client letter rom CEP

1 signed copy Form 8879, IRS e-fle Signature Authorization

1 copy Federal Tax Return1040 pgs 1-2 and all schedules or orms

1 copy Illinois Tax ReturnIL1040 pgs 1-2 and all schedules or orms

All o clients original documents

I client is mailing returns:

To IRS (ensure correct reund or payment enelope is used):

Full copy o 1040 - pgs 1-2, all schedules or orms that hae an Attachment

Sequence Number in the upper right corner, W-2s/1099s attached

To IDOR (ensure correct reund or payment enelope is used):

Full copy IL1040 pgs 1-2, all schedules or orms, W-2s/1099s attached

Note: When the client has retirement income, attach a copy o page 1 o the

Form 1040 to the Illinois tax return.

IMPORTANT:

PLEASE MAKE SURE ALL FORMS ARE COMPLETED FULLY AND SIGNED BY THE CLIENT.

PRE-ADDRESSED ENVELOPES ARE AVAILABLE AT THE SORTING TABLE.

15


CLIENT INTAKE

Reiew the Intake Sheet and Supplemental Intake Sheet careully to ensure the

clients answers to the questions are clear. I anything is unclear, ask about it.

Social Security Cards To e-fle, clients must bring the actual social

& Picture ID security cards (or ITIN letter) or eeryone on the

return and IDs or all adults on the tax return.

Income Documents Clients need to bring W-2s and 1099s or all

jobs they or their spouse worked last year,

as well as 1099s or social security payment,

unemployment, interest income and any

pensions or retirement income.

Income Guidelines We sere indiiduals with income under

$25,000 and amilies (more than one person in

the household) with income under $50,000

Spouses We cannot fle a return electronically i the

spouse is not present to sign the e-fle

authorization.

Childcare Provider EIN/SSN This is necessary to claim the child care credit.

Supporting Documents These are documents that are related to

expenses they paid oer the year, such as

mortgage interest statements, property taxes,

student loan interest, expenses related to

sel-employment, tuition and ees and book

expenses or college.

Rental Income We do not prepare returns or clients who

hae rental income.

Additional Advice Notiy clients o other serices aailable on

site, such as fnancial products and FAFSA

preparation. Make sure the client reads and

understands the Use & Disclosure Form.

SITE ASSISTANT INFORMATION // vOLUNTEER ANSWER GUIDE 2012

14


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REQUESTING DONATIONS

Clients will be gien the opportunity to make a monetary donation to the Center or

Economic Progress by sending a text message rom a cell phone or taking a paper

enelope to mail a donation. Making a donation is completely oluntary, and clients will

be oered the opportunity to donate only ater tax preparation is complete.

Sorters are responsible or oering clients the opportunity to donate ia text message.

Donation enelopes are also aailable or clients to mail cash or check donations.

How to Ask

Ask clients only at the end o tax preparation and sorting, ater they hae

receied all their serices. Neer create the impression that giing or not

giing will aect the serice they receie.

Let clients know that CEP relies on donations rom supporters. Ask clients

i they would like to make a donation. Proide text message instructions or

hand out donation enelopes.

I clients are not sure, let them know that een small donations are

welcome.

I clients say no, you can say, Thats fnemaybe some other time. There

must neer be pressure or guilt about giing or not giing.

Thank clients warmly.

Ask with ConfdenceBy working hard at your tax site, you gie all you can to CEP; you can eel

good about asking the same o clients.

Remember that you are giing clients an opportunity to eel good. Giing

een small amounts builds sel-esteem or the gier and helps clients eel

pride in supporting CEP.

You are building long-term support or CEP by building the donor base,

howeer small the donation.

Dont Assume Clients Cant Aord It

People may hae resources that are not obiousa parent, partner or riend

who can make a donation, a little extra cash in his/her pocket. I we ask any

clients, we hae to ask all clients.

Small donations make a big dierence! Many small donations add up to tens

o thousands o dollars that can be used to proide better serices or clients

in need.Een i clients cant gie today, your request may plant the seed or a

uture donation.


Sorting Amended Returns

In the older, in this order:

Same as current year returns, preious page

To the client, in this order:

Client letter rom CEP

1 copy Federal Tax Return1040X pgs 1-2, original 1040 pgs 1-2 and all

schedules or orms

1 copy Illinois Tax ReturnIL-X pgs 1-2, 1040X pg 1, original IL1040 pgs 1-2and all schedules or orms

All o clients original documents

Client to mail:

To IRS:

1040X pgs 1-2, 1040 pgs 1-2, all schedules and orms and any new

supporting documents attached

Address:

Department o Treasury

Internal Reenue Serice

Fresno, CA 93888-0422

To IDOR:

IL-X pgs 1-2, 1040X pg 1, original IL-1040 pgs 1-2, all schedules or orms andany new supporting documents attached

Address:

Located at bottom o page 2 o the IL-X

SITE ASSISTANT INFORMATION // vOLUNTEER ANSWER GUIDE 2012

16 17


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19

vOLUNTEER ANSWER GUIDE 2012 // TAX PREPARATION INFORMATION

SEVEN BASIC STEPS OF TAX PREPARATION

1. Review Client Intake Forms: Form 13614-C, Supplemental Intake Sheet and

Consent to Use/Disclose

Make sure both are complete.

Check or the client signature on the consent orms.

Get all o your questions answered!

2. Complete the TaxWise Intake Forms

Main Inormation Sheet: Pay close attention to the dependent/nondependent

section.

Preparer Use Form: Enter the answers to the questions asked on the

Supplemental Intake Sheet.

3. Enter all income

Enter W-2s and 1099s.

Complete any Schedule C-EZs or Cs.

4. Enter all adjustments, deductions and credits

Enter adjustments, such as student loan interest and/or tuition and ees

deduction.

Enter property tax paid and determine i client should itemize using

Schedule A.

Enter child care payments and proider inormation.

I client or clients dependent attended college, enter education expenses.

5. Get the red out!

Address all red exclamation points.

Use Ctrl-E to fnd problem areas on a specifc orm.

6. Review

Run TaxWise diagnostics and correct any errors.

Click the e-fle button i the client is fling electronically.

Hae a site manager/quality reiewer reiew the return.

Print the return and ask the client to look it oer.

7. Counsel

I there is a balance due, discuss preention: W-4 or estimated tax options.

I the client cant pay the balance due, discuss payment options and gie the

client a CEP tax clinic reerral card.

When the client has a reund, discuss direct deposit: back account, saings

bond and debit card options.

I the client is interested in FAFSA preparation, reer the client to on-site

specialists or direct the client to call the CEP ofce at (312) 630-0248.

taX PreParatIon InormatIon


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TAX PREPARATION INFORMATION // vOLUNTEER ANSWER GUIDE 2012

20

COMMON TAX FORMS

Federal 1040 U.S.IndividualIncomeTaxReturn

Federal SchA ItemizedDeductions

Federal SchB InterestandOrdinaryDividends

Federal SchC-EZ NetProftromBusiness

Federal SchEIC EarnedIncomeCredit

Federal SchSE Sel-EmploymentTax

Federal 2441 ChildandDependentCareExpenses

Federal 8812 AdditionalChildTaxCredit

Federal 8863 EducationCredits

Federal 8880 CreditorQualifedRetirementSavingsContributions

Federal 8917 TuitionandFeesDeduction

State IL-1040 IllinoisIndividualIncomeTaxReturn

State SchICR IllinoisCredits

TYPE OF FORM FORM NUMBER FORM TITLE

21


Federalincometaxreturn N/A Yes

Itemizeddeductions 40 No

Interestanddividendincome 8&9 No

Sel-employedincome&expenses(short) 12 No

EITCwithqualiyingchild 64a Yes

Sel-employmenttax 56 Yes

Childanddependentcarecredit 48 Yes

Additionalchildtaxcredit 65 Yes

Educationcredits 49 No

Retirementsavingscredit 50 Yes

Adjustmentortuitionandees 34 No

Illinoisincometaxreturn N/A N/A

EITC,propertytaxcredit,K-12educationcredit 17&28 Yes

ISSUE LINK FROM 1040, LINE OPENS AUTOMATICALLY?


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22

ALL THOSE KIDS

Attheendothetaxyear,thechild

mustbeunder19,orunderage24

iaulltimestudent,andmustbe

youngerthanthetaxpayer.The

childcanbeanyageithechildis

disabled.






disabled.

Childmustbeunderage17at

theendotheyearandmustbe

youngerthanthetaxpayer.

Note: There is no exception for

students or the disabled.






disabled.

Childmustbeunderage13or

disabledatthetimeothechild

care.

Childmustbetaxpayerschild,

stepchild,adoptedchild,oster

child,sibling,stepsibling,or

descendentoanyothese.Ithe

taxpayerisnotthechildsparent,

specialrestrictionsmayapply.

























AGE RELATIONSHIP

EarnedIncomeTaxCredit

DependencyExemption

ChildTaxCredit

HeadoHousehold

ChildCareCredit

Warning! This chart is a summary. Please reer to Publication 17, vITA Resource Guide 4012 or other resource material.

23


ChildmustliveintheU.S.withthetaxpayer

ormorethanhalthetaxyear.Some

temporaryabsencescountastimelivedat

home.

Childmustlivewiththetaxpayerormore

thanhalthetaxyear.Sometemporary

absencescountastimelivedathome.










Nosupporttest.

Note: There is an exception for a married

child that cannot provide over 1/2 of his/her

own support for the tax year.

Childdidnotprovideover1/2ohis/herown

supportorthetaxyear.



Note: Child must also be claimed as the

taxpayers dependent.



Note: Taxpayer must provide over half the

cost of maintaining the home.



RESIDENCY SUPPORT


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24

ALL THOSE KIDS PART 2

EITC

Dependent

ChildTaxCredit

HeadoHousehold

ChildCareCredit

Yes

No

No

No

No

No

(Chilmustlivewiththe

taxpayer)

Yes

Yes

No

(Childmustlivewith

thetaxpayer)

No

(Childmustlivewith

thetaxpayer)

No

Yes

No

Yes

(Mustbedependents

thatarerelated)

Yes

(Certaindisabled

dependents)

CHILD MUST HAVE EXCEPTION FOR QUALIFYING RELATIVE

SSN (NOT ITIN)? DIVORCED/SEPARATED RULES CAN BE USED

PARENTS CAN BE USED? TO GET OR INCREASE

THIS BENEFIT?

25


Yes

Yes

No

Yes

Yes

No

No

No

Yes

Yes

A DISABLEDCHILD CAN BEANY AGE?

CAN THE TAXPAYERBE A QUALIFYINGCHILD?

CITIZENSHIP

ChildmustbeU.S.citizenoralegalresidento

theUS.

ChildmustbeU.S.citizenoraresidentothe

U.S.,CanadaorMexico.

ChildmustbeU.S.citizenoraresidentotheU.S.

atsometimeduringthetaxyear.






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26

QUALIFYING RELATIVES

EITC

DependencyExemption

ChildTaxCredit

HeadoHousehold

Child&DependentCare

Credit

QRisnotaqualiyingchildo

anothertaxpayerwhohasafling

requirementorclaimsEITC.







QRisadescendent,sibling,

ascendant,niece/nepheworin-law

ORliveswiththetaxpayerallyear.


ascendant,niece/nephewor

in-law.


ascendant,niece/nepheworin-law

ORliveswiththetaxpayerallyear.

CANNOT BE QUALIFYING CHILD RELATIONSHIP

Warning! This chart is a summary. Please reer to Publication 17, vITA Resource Guide 4012 or other resource material.

Note:QualiyingRelative

rulesdonotapply.


rulesdonotapply.

27


ItheQRisnotrelatedtothe

taxpayer,QRmustlivewiththe

taxpayerallyear.ItheQRis

relatedthereisnoresidency

requirement.

QRlivedwiththetaxpayermore

than6monthsothetaxyear.

Exception:ataxpayersparentis

notrequiredtoresidewiththe

taxpayer.

QRmustlivewiththetaxpayer

morethan6monthsothetax

year.

Thetaxpayerprovidedover1/2

otheQRsfnancialsupportor

thetaxyear.Exception:multiple

supportagreements.

Thetaxpayerprovidedover1/2o

theQRsfnancialsupportorthe

taxyear.Note:Also,thetaxpayer

mustpaymorethan1/2thecosto

maintainingthehome.

Thetaxpayerprovidedover1/2o

theQRsfnancialsupportorthe

taxyear.

RESIDENCY SUPPORT INCOME


rulesdonotapply.


rulesdonotapply.

QRhadincomelessthan

$3,700.

QRhadincomelessthan

$3,700.

Thereisnoincometest.


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28

INCOME CHART

FORM DESCRIPTION TYPE

W-2 Wages Earned

W-2G Gamblingwinnings Unearned

1099-DIV Dividends Unearned

1099-INT Interest Unearned

1099-DIV/1099-B Capitalgaindistributions Unearned

1099-G Unemployment Unearned

1099-G Statetaxreund Unearned

1099-MISC Nonemployeecompensation(box7) Earned

1099-MISC Otherincome(box3) Unearned

SSA-1099 Socialsecuritybenefts Unearned

RRB-1099-R Railroadretirement Unearned

1099-R Pension Unearned

None CashorworknotonW-2or1099-MISC Earned

29


1040,line7 IcantgetW-2,usesubstitute,Form4852.

1040,line21 LinktoW-2G.Mustitemizetodeductgamblingexpenses,which

cannotexceedwinnings.

1040,line9 EnteronTaxWisedividendstatement.

1040,line8 EnteronTaxWiseintereststatement.

1040,line13 EnteronTaxWisedividendstatement.

1040,line19 Linkto1099-Gworksheet.

1040,line10 Linktostatetaxreundworksheet.Reportonlyiclientitemizedor

2010&deductedstateincometax.

1040,line12 Linkrom1040toSch.C-EZ/C;thenlinkromline1oC-EZ/C.Can

deductexpenses;netincomesubjecttoSEtax.

1040,line21 Seethesitemanager.

1040,line20 Alwaysenter!Linkto1040worksheet1.

1040,lines16&20 SeeIRSPub.4012,yellowtabTaxWiseIncomeoropena1099-R,

hitF1,gotobottomothepage.

1040,line16 Seethesitemanageritaxableamountisnoton1099-R.Not

taxableorIL.

1040,line12 Linkrom1040toSch.C-EZ/C;thenlinkromline1oC-EZ/Ctoa

scratchpad.Candeductexpenses;netincomesubjecttoSEtax.

LINK FROM 1040, LINE COMMENTS


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30

CHILD TAX CREDIT & ADDITIONAL CHILD TAX CREDIT

Both credits:

The maximum amountor both credits combinedis $1,000/child.

Credits based on the number o qualiying children, amount o income tax

and the amount and type o income on the return.

The child/children must be a qualiying child who is under age 17 at the end

o the tax year. There is no exception to the age requirement.

Specifc to Child Tax Credit:

The child tax credit is nonreundable and appears on Form 1040, page 2, line

51.

The child tax credit is applied to income tax ater other nonreundable credits

hae been used.

Specifc to Additional Child Tax Credit:

The additional child tax credit is reundable and appears on Form 1040, page

2, line 65.

When additional child tax credit is claimed, the Form 8812 must be fled with

the tax return.

A client generally receies the additional child tax credit when two tests are

met:

1. The ull child tax credit, $1,000 per child, is more than is needed to

oset income tax.

2. At least one o the ollowing is true:

The client has earned income oer $3,000.

The client has three or more qualiying children.

Note: TaxWise automatically computes both credits and prepares Form 8812.

Remember to complete the dependent section o the Main Inormation Sheet cor-

rectly. Do not oerride! TaxWise will do the rest.

31


CHILD & DEPENDENT CARE CREDIT

The credit is nonreundable. I there is zero taxable income (orm 1040, line

43) there is no reason to claim the credit.

The qualiying child must be under age 13 or disabled at the time o the child

care.

In some cases, the cost o care or a disabled spouse or other dependent

qualifes.

The child care generally must be work-related; that is, babysitting that en-

ables the client to work.

For married couples, both taxpayers generally must be working and fle a

joint return.

The credit is claimed using Form 2441, Child and Dependent Care Expenses.

The proiders name, address and identiying number must be reported on

Form 2441

TaxWise Hint: Mark the DC box next to the childs name on the Main Inormation

Sheet.


18/20


32

BENEFITS RELATED TO EDUCATION

WHOS LIKELY MAXIMUM ANNUAL EXPENSES

TO BENEFIT? ANNUAL BENEFIT NEEDED FOR

MAXIMUM BENEFIT

American

OpportunityCredit

LietimeLearning

TuitionandFees

Deduction

StudentLoan

InterestDeduction

EducatorExpense

Adjustment

IllinoisEducation

Credit

Fulltime

undergraduateina

degreeprogram

Takingjust1-2

classesoringraduateschool

Takingjust1-2

classesorin

graduateschool;zero

taxableincome

Formerstudent

payingonloans

Schoolteachers,

gradesK-12

Parentswithchildren

inprivateschool,K-12

$1,000reundable

creditplus$1,500

nonreundablecredit

$2,000nonreundable

credit

$4,000adjustmentto

income

$2,500adjustmentto

income

$250adjustmentto

income($500onjoint

returnibothtaxpayers

areteachers)

$500nonreundableIL

statecredit

$4,000

$10,000

$4,000

$2,500

$250($500onjoint

returniboth

taxpayersare

teachers)

$2,250

* Caution! a dui xps y b usd , yp x bf. S yu si

g i yu usu hw di h pppi bf i.

33


STUDENT REQUIRED YEARS EXPENSES HOW TO CLAIM?

REQUIREMENT TO ATTEND AVAILABLE ELIGIBLE

AT LEAST

HALF-TIME?

Mustbepursuing

undergraduate

degree.

Doesnotneedtobe

indegreeprogramiclassimprovesjob

skills.

Doesnotneedtobe

pursuingadegree

Loanusedor

undergraduateor

graduateschool,ina

degreeprogram.

N/A

Attendingelementary

orsecondaryschool

Yes

No

No

Yes,atthe

timewhen

theborrower

wasattending

school

N/A

N/A

Fouryears

Unlimited

Unlimited

Unlimited

Unlimited

Unlimited

Tuition,ees,

books,course

materials

Tuition&eesonly

Tuitionandees

only

Loansusedtopay

tuition,ees,books,

coursematerials,

room&board,

transportation

Books,supplies,

equipmentor

classroomuse

Tuitionand

requiredbookandlabeesinexcess

o$250

Form1040,lines

49&66,linkto

Form8863

Form1040,line49,

linktoForm8863

Form1040,line34,

linktoeducation

worksheet

Form1040,line33,

linktoeducation

worksheet

Form1040,line23,

linktoeducation

worksheet

FormIL-1040,line

17,linktoIL-ScheduleICR


19/20


34

PRINTING

1. Select rom the toolbar while the tax return is open in TaxWise.

Note: You may also open the File menu and select Print Return.

2. Select the ollowing print packets:

For an e-fle return

Signature Pages

File Copy

For a paper return

File Copy

Federal Copy to be Mailed

State Copy to be Mailed

35


PRINTING THE CLIENT LETTER IN SPANISH

1. In the TaxWise tree, click and highlight Letter[TCP Client - ENGLISH]

2. Click Letter on the fle menu

3. Select Open Letter

4. Select TCP Client - SPANISH.CL

5. Click Open

The Spanish ersion o the client letter will replace the English letter.

ITIN TAX RETURNS

An Indiidual Taxpayer Identifcation Number (ITIN) is a 9-digit number

assigned by the IRS or taxpayers who do not qualiy or an SSN. ITIN

returns can be e-fled, just like any other return.

Start the return using the taxpayers ITIN number instead o an

SSN. I the spouse has an ITIN, enter that number on the Main

Inormation screen.

In the TaxWise W-2 screen, use the SSN as it appears on the

taxpayers W-2.

State returns with ITINs can be e-fled as well. No special

procedures are needed.

A taxpayer who needs an ITIN should be reerred to a CEP ITIN

eent, the IRS or a paid preparer to fle an ITIN application. ITIN

eent inormation can be ound on the CEP website at www.

economicprogress.org/clients/ITIN. Taxpayers should be adised to

bring all the inormation to fle their tax return to the eent. They

should also bring a birth certifcate and a alid picture ID to establish

1) their oreign status and 2) identity or any amily member

who needs an ITIN. A alid passport is sufcient to satisy both

requirements.


20/20

NOTES & ADDITIONAL INFORMATION