You Can Do It!

THE 2012 VOLUNTEER ANSWER GUIDE

CHICAGO (MAIN OFFICE)

29 E. Madison, Suite 900 Chicago, IL 60602 (312) 252-0280

SPRINGFIELD

687 E. Linton Springfield, IL 62703 (217) 753-3272

www.economicprogress.org

CONTENTS

General Information 2012 Tax Sites Locations and Hours Financial Services at CEP Sites Tax Clinic Referral Federal Refund Timeline Financial Services Information Savings Options Direct Deposit Options FAFSA Services Savings Bond Basics Site Assistant Information Site Assistant Responsibilities Client Intake Sorting Requesting Donations Tax Preparation Information Seven Basic Steps of Tax Preparation Common Tax Forms All Those Kids All Those Kids-Part 2 Qualifying Relatives Income Chart Child Tax Credit & Additional Child Tax Credit Child & Dependent Care Credit Benefits Related to Education Printing Printing the Client Letter in Spanish ITIN Tax Returns Notes & Additional Information

3 4 6 6 7 9 10 10 11 11 12 13 14 15 17 18 19 20 22 24 26 28 30 31 32 34 35 35 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 volunteer@economicprogress.org for more information. 2011 Center for Economic Progress

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2012 TAX SITES LOCATIONS AND HOURS

TBD

TBD

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FINANCIAL SERVICES AT CEP SITES

Clients should always be encouraged to use direct deposit for their tax refund. Direct deposit is more secure than receiving a paper check and the refund arrives faster. Clients without bank accounts should be referred to the on-site bank partner to open an account. If a client is interested in receiving the refund on a prepaid debit card, the tax preparer can open a prepaid debit card from the TaxWise main information screen. If clients are interested in additional financial services, refer them to our client line: 312.630.0248. Our staff can help with FAFSA completion, as well as understanding the financial aid application process and aid offers/awards.

FEDERAL REFUND TIMELINE

Clients who file Electronically Electronically On paper (by mail) On paper (by mail)

And receive refund by Direct deposit Paper check Direct deposit Paper check

Can expect their refund in 2 weeks 34 weeks 56 weeks 68 weeks

TAX CLINIC REFERRAL

CEPs tax clinic represents clients with tax disputes before the IRS and Illinois Department of Revenue (IDR). The clinic assists clients with the following types of matters: Audits Garnishments: bank, wage and social security levies 1099-A and 1099-C cancellation of indebtedness issues Payment arrangements/debt negotiation Pre-2008 original returns and 1040Xs (subject to staff availability)

Note: This is a very general guideline. Many factors determine when a client receives a refund: USPS, IRS delays, time of filing and rejects due to errors on the return. Clients can check on their refund by going to www.irs.gov and clicking on the Wheres My Refund? link, or calling (800) 829-1954. Prior year and amended returns are subject to longer time frames. Clients can help by double checking ALL information on their returnnames, social security numbers, birthdates, and bank information.

The Clinic does not assist clients with the following types of matters: Property tax IDR matters only (a federal matter must exist as well) Business entities, including S Corporations Disputes with paid preparers over rapid refunds To refer a client to the Tax Clinic: Complete a clinic referral form and give it to your site manager. Alternatively, the client can leave a message on the clinic voicemail line: (312) 630-0241. The client can expect to be contacted within five business days of the clinics receipt of the referral form. Depending on method of delivery this could be between one and 10 days after you complete the form. Calls will be returned as soon as practicable.

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SAVINGS OPTIONS
Challenge Small amount to save Credit history problems Product options Savings account; savings bond Savings account; savings bond Feature Only need $50 minimum for bond No credit screening (e.g. no ChexSystem); positive usage of savings account can build credit Suspicious of financial institutions No bank account Wary of saving/not sure if they can save Savings bond Savings account No bank account required Begins a savings habit but money can be accessed immediately in case of emergency Savings bond Government backed; no fees

FAFSA SERVICES
At most tax sites, there will be an Illinois Student Assistance Commission (ISAC) member or volunteer tax preparer that is trained to assist clients with financial aid applications. Please refer interested clients to FAFSA volunteers. If no trained volunteer or ISAC member is present, refer the client to our FAFSA help line: 312.630.0248 or fauhelp@economicprogress.org. If you would like to prepare financial aid applications in addition to preparing tax returns, complete the FAFSA Assistance trainings online or contact volunteer Services at volunteer@economicprogress.org or 312.630.0288. FAFSA preparers: Please take a few minutes with each FAFSA client to complete the tracking survey at www.economicprogress.org/survey. 1. Purpose: Inform the client about the purpose of the survey. Script: We are asking that you complete this survey so that we can better serve our clients. This will help us know if we are reaching out to people who need our services and will also help us improve our services. 2. Confidentiality and Data Security: Assure your client that his/her survey responses will be confidential and that all data will be held in a secure database. Script: All your answers will be completely confidential. 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 Feature No credit screening (e.g. no ChexSystem); positive usage of savings account can build credit will have access.

DIRECT DEPOSIT OPTIONS*

Challenge Credit history problems Product options Savings account; prepaid debit card

SAVINGS BOND BASICS

1. Low-risk and backed by the U.S. Treasury 2. Does not require a bank account 3. No fees 4. Easily cashed at any bank 5. Able to purchase the bond directly from the tax return on form 8888 6. Bonds mailed as paper bond certificates to the address on the tax return 7. May take up to three weeks for the tax filer to receive the bond

Suspicious of financial institutions

Prepaid debit card

No bank account required; operates more like a credit card than bank account

Needs quick access to tax refund

Savings or checking account; prepaid debit card

If return is electronically filed, it only takes about 7-10 days

Check cashing fees

Savings or checking account; prepaid debit card

Allows deposits and access to cash without fees

*First priority is to get an unbanked client over to talk with the on-site financial partner to see if they have an account that will meet their needs.

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SITE ASSISTANT RESPONSIBILITIES

Site assistants are extremely important in keeping the site running efficiently. There are a variety of roles that site assistants fill; please consult with your site manager to determine the best ways to help out. Beginning/End of Shift Post/take down income guidelines, site signs, and IRS posters Prepare/file client sign-in sheet and set up/clean up intake area Assist with site setup/cleanup, including laptops at laptop sites Throughout Shift Greeting Welcome each client, notify them of 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 information are in their folder. Discuss available financial services such as financial products, savings options and FAFSA preparation.

SIte aSSIStant InformatIon

Sorting Sort completed returns, get client signatures on required documents and give client their copies. Tell them when and how to expect their refund and address any questions they may have before leaving. Inquire about clients interest in making a monetary donation to CEP. Translating If proficient in another language, assist with translation as needed. Filing File completed client folders according to social security number. Shredding Shred all extra print jobs, unneeded copies of documents and erroneous tax returns. Child care Keep the site calm by entertaining clients children. Share crayons and coloring pages as well as picture books. Invite children to draw a picture for the volunteer completing their familys return.

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CLIENT INTAKE
Review the Intake Sheet and Supplemental Intake Sheet carefully to ensure the clients answers to the questions are clear. If anything is unclear, ask about it.

SORTING
Have the client review the printout of the Main Information Sheet and double check names, SSN, addresses and dates of birth for all persons on the return.

Social Security Cards & Picture ID

To e-file, clients must bring the actual social security cards (or ITIN letter) for everyone on the return and IDs for all adults on the tax return.

Double check direct deposit information for accuracy (1040, pg 2) Ensure Use & Disclosure Form is signed by the client on front and back when necessary.

Income Documents

Clients need to bring W-2s and 1099s for all jobs they or their spouse worked last year, as well as 1099s for social security payment, unemployment, interest income and any pensions or retirement income.
IMPORTANT: PLEASE MAKE SURE ALL FORMS ARE COMPLETED FULLY AND SIGNED BY THE CLIENT.

The exterior of the client folder should be filled out completely, including indication of a signed 8879 for e-filed tax returns.

Income Guidelines

We serve individuals with income under $25,000 and families (more than one person in the household) with income under $50,000

PRE-ADDRESSED ENVELOPES ARE AVAILABLE AT THE SORTING TABLE.

Sorting Current Year Returns Spouses We cannot file a return electronically if the spouse is not present to sign the e-file authorization. Childcare Provider EIN/SSN Supporting Documents This is necessary to claim the child care credit. These are documents that are related to expenses they paid over the year, such as mortgage interest statements, property taxes, student loan interest, expenses related to self-employment, tuition and fees and book expenses for college. Rental Income We do not prepare returns for clients who have rental income. Additional Advice Notify clients of other services available on site, such as financial products and FAFSA preparation. Make sure the client reads and understands the Use & Disclosure Form. If client is mailing returns: To IRS (ensure correct refund or payment envelope is used): Full copy of 1040 - pgs 1-2, all schedules or forms that have an Attachment Sequence Number in the upper right corner, W-2s/1099s attached To IDOR (ensure correct refund or payment envelope is used): Full copy IL1040 pgs 1-2, all schedules or forms, W-2s/1099s attached Note: When the client has retirement income, attach a copy of page 1 of the Form 1040 to the Illinois tax return. To the client, in this order: Client letter from CEP 1 signed copy Form 8879, IRS e-file Signature Authorization 1 copy Federal Tax Return1040 pgs 1-2 and all schedules or forms 1 copy Illinois Tax ReturnIL1040 pgs 1-2 and all schedules or forms All of clients original documents In the folder, in this order: 1 signed (front and back) Use & Disclosure Form (all returns) Intake Sheet (Form 13614-C) and Supplemental Intake Sheet (all returns) 1 copy of each W-2, 1099 and any other supporting documents (all returns) Main Information Sheet, all W-2 summaries or other printed worksheets (all returns)

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Sorting Amended Returns In the folder, in this order: Same as current year returns, previous page To the client, in this order: Client letter from CEP 1 copy Federal Tax Return1040X pgs 1-2, original 1040 pgs 1-2 and all schedules or forms 1 copy Illinois Tax ReturnIL-X pgs 1-2, 1040X pg 1, original IL1040 pgs 1-2 and all schedules or forms All of clients original documents Client to mail: To IRS: 1040X pgs 1-2, 1040 pgs 1-2, all schedules and forms and any new supporting documents attached Address: Department of Treasury Internal Revenue Service Fresno, CA 93888-0422 To IDOR: IL-X pgs 1-2, 1040X pg 1, original IL-1040 pgs 1-2, all schedules or forms and any new supporting documents attached Address: Located at bottom of page 2 of the IL-X

REQUESTING DONATIONS
Clients will be given the opportunity to make a monetary donation to the Center for Economic Progress by sending a text message from a cell phone or taking a paper envelope to mail a donation. Making a donation is completely voluntary, and clients will be offered the opportunity to donate only after tax preparation is complete. Sorters are responsible for offering clients the opportunity to donate via text message. Donation envelopes are also available for clients to mail cash or check donations. How to Ask Ask clients only at the end of tax preparation and sorting, after they have received all their services. Never create the impression that giving or not giving will affect the service they receive. Let clients know that CEP relies on donations from supporters. Ask clients if they would like to make a donation. Provide text message instructions or hand out donation envelopes. If clients are not sure, let them know that even small donations are welcome. If clients say no, you can say, Thats finemaybe some other time. There must never be pressure or guilt about giving or not giving. Thank clients warmly. Ask with Confidence By working hard at your tax site, you give all you can to CEP; you can feel good about asking the same of clients. Remember that you are giving clients an opportunity to feel good. Giving even small amounts builds self-esteem for the giver and helps clients feel pride in supporting CEP. You are building long-term support for CEP by building the donor base, however small the donation. Dont Assume Clients Cant Afford It People may have resources that are not obviousa parent, partner or friend who can make a donation, a little extra cash in his/her pocket. If we ask any clients, we have to ask all clients. Small donations make a big difference! Many small donations add up to tens of thousands of dollars that can be used to provide better services for clients in need. Even if clients cant give today, your request may plant the seed for a future donation.

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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 for the client signature on the consent forms. Get all of your questions answered! 2. Complete the TaxWise Intake Forms Main Information 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 fees deduction. Enter property tax paid and determine if client should itemize using Schedule A. Enter child care payments and provider information. If client or clients dependent attended college, enter education expenses. 5. Get the red out! Address all red exclamation points. Use Ctrl-E to find problem areas on a specific form. 6. Review Run TaxWise diagnostics and correct any errors. Click the e-file button if the client is filing electronically. Have a site manager/quality reviewer review the return. Print the return and ask the client to look it over. 7. Counsel If there is a balance due, discuss prevention: W-4 or estimated tax options. If the client cant pay the balance due, discuss payment options and give the client a CEP tax clinic referral card. When the client has a refund, discuss direct deposit: back account, savings bond and debit card options. If the client is interested in FAFSA preparation, refer the client to on-site specialists or direct the client to call the CEP office at (312) 630-0248.

taX PreParatIon InformatIon

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COMMON TAX FORMS

TYPE OF FORM FORM NUMBER FORM TITLE ISSUE LINK FROM 1040, LINE OPENS AUTOMATICALLY?

Federal Federal Federal Federal Federal Federal Federal Federal Federal Federal Federal State State

1040 Sch A Sch B Sch C-EZ Sch EIC Sch SE 2441 8812 8863 8880 8917 IL-1040 Sch ICR

U.S. Individual Income Tax Return Itemized Deductions Interest and Ordinary Dividends Net Profit from Business Earned Income Credit Self-Employment Tax Child and Dependent Care Expenses Additional Child Tax Credit Education Credits Credit for Qualified Retirement Savings Contributions Tuition and Fees Deduction Illinois Individual Income Tax Return Illinois Credits

Federal income tax return Itemized deductions Interest and dividend income Self-employed income & expenses (short) EITC with qualifying child Self-employment tax Child and dependent care credit Additional child tax credit Education credits Retirement savings credit Adjustment for tuition and fees Illinois income tax return
EITC, property tax credit, K-12 education credit

N/A 40 8 & 9 12 64a 56 48 65 49 50 34 N/A

Yes No No No Yes Yes Yes Yes No Yes No N/A

17 & 28

Yes

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ALL THOSE KIDS

AGE RELATIONSHIP RESIDENCY SUPPORT

Earned Income Tax Credit

At the end of the tax year, the child must be under 19, or under age 24 if a full time student, and must be younger than the taxpayer. The child can be any age if the child is disabled. At the end of the tax year, the child must be under 19, or under age 24 if a full time student, and must be younger than the taxpayer. The child can be any age if the child is disabled. Child must be under age 17 at the end of the year and must be younger than the taxpayer. Note: There is no exception for students or the disabled.

Child must be taxpayers child, stepchild, adopted child, foster child, sibling, stepsibling, or descendent of any of these. If the taxpayer is not the childs parent, special restrictions may apply. Child must be taxpayers child, stepchild, adopted child, foster child, sibling, stepsibling, or descendent of any of these. If the taxpayer is not the childs parent, special restrictions may apply. Child must be taxpayers child, stepchild, adopted child, foster child, sibling, stepsibling, or descendent of any of these. If the taxpayer is not the childs parent, special restrictions may apply. Child must be taxpayers child, stepchild, adopted child, foster child, sibling, stepsibling, or descendent of any of these. If the taxpayer is not the childs parent, special restrictions may apply. Child must be taxpayers child, stepchild, adopted child, foster child, sibling, stepsibling, or descendent of any of these. If the taxpayer is not the childs parent, special restrictions may apply.

Child must live in the U.S. with the taxpayer for more than half the tax year. Some temporary absences count as time lived at home.

No support test. Note: There is an exception for a married child that cannot provide over 1/2 of his/her own support for the tax year.

Dependency Exemption

Child must live with the taxpayer for more than half the tax year. Some temporary absences count as time lived at home.

Child did not provide over 1/2 of his/her own support for the tax year.

Child Tax Credit

Child must live with the taxpayer for more than half the tax year. Some temporary absences count as time lived at home.

Child did not provide over 1/2 of his/her own support for the tax year. Note: Child must also be claimed as the taxpayers dependent.

Head of Household

At the end of the tax year, the child must be under 19, or under age 24 if a full time student, and must be younger than the taxpayer. The child can be any age if the child is disabled. Child must be under age 13 or disabled at the time of the child care.

Child must live with the taxpayer for more than half the tax year. Some temporary absences count as time lived at home.

Child did not provide over 1/2 of his/her own support for the tax year. Note: Taxpayer must provide over half the cost of maintaining the home.

Child Care Credit

Child must live with the taxpayer for more than half the tax year. Some temporary absences count as time lived at home.

Child did not provide over 1/2 of his/her own support for the tax year.

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

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ALL THOSE KIDS PART 2

CHILD MUST HAVE SSN (NOT ITIN)? EXCEPTION FOR DIVORCED/SEPARATED PARENTS CAN BE USED? QUALIFYING RELATIVE RULES CAN BE USED TO GET OR INCREASE THIS BENEFIT? A DISABLED CHILD CAN BE ANY AGE? CAN THE TAXPAYER BE A QUALIFYING CHILD? CITIZENSHIP

EITC

Yes

No (Chilmust live with the taxpayer) Yes

No

Yes

No

Child must be U.S. citizen or a legal resident of the US.

Dependent

No

Yes

Yes

No

Child must be U.S. citizen or a resident of the U.S., Canada or Mexico.

Child Tax Credit

No

Yes

No

No

No

Child must be U.S. citizen or a resident of the U.S. at some time during the tax year.

Head of Household

No

No (Child must live with the taxpayer) No (Child must live with the taxpayer)

Yes (Must be dependents that are related) Yes (Certain disabled dependents)

Yes

Yes

Child must be U.S. citizen or a resident of the U.S., Canada or Mexico.

Child Care Credit

No

Yes

Yes

Child must be U.S. citizen or a resident of the U.S., Canada or Mexico.

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QUALIFYING RELATIVES
CANNOT BE QUALIFYING CHILD RELATIONSHIP RESIDENCY SUPPORT INCOME

EITC Note: Qualifying Relative rules do not apply. Note: Qualifying Relative rules do not apply.

Dependency Exemption

QR is not a qualifying child of another taxpayer who has a filing requirement or claims EITC.

QR is a descendent, sibling, ascendant, niece/nephew or in-law OR lives with the taxpayer all year.

If the QR is not related to the taxpayer, QR must live with the taxpayer all year. If the QR is related there is no residency requirement.

The taxpayer provided over 1/2 of the QRs financial support for the tax year. Exception: multiple support agreements.

QR had income less than $3,700.

Child Tax Credit Note: Qualifying Relative rules do not apply. Note: Qualifying Relative rules do not apply.

Head of Household

QR is not a qualifying child of another taxpayer who has a filing requirement or claims EITC.

QR is a descendent, sibling, ascendant, niece/nephew or in-law.

QR lived with the taxpayer more than 6 months of the tax year. Exception: a taxpayers parent is not required to reside with the taxpayer.

The taxpayer provided over 1/2 of the QRs financial support for the tax year. Note: Also, the taxpayer must pay more than 1/2 the cost of maintaining the home.

QR had income less than $3,700.

Child & Dependent Care Credit

QR is not a qualifying child of another taxpayer who has a filing requirement or claims EITC.

QR is a descendent, sibling, ascendant, niece/nephew or in-law OR lives with the taxpayer all year.

QR must live with the taxpayer more than 6 months of the tax year.

The taxpayer provided over 1/2 of the QRs financial support for the tax year.

There is no income test.

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

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INCOME CHART
FORM DESCRIPTION TYPE LINK FROM 1040, LINE COMMENTS

W-2 W-2G

Wages Gambling winnings

Earned Unearned

1040, line 7 1040, line 21

If cant get W-2, use substitute, Form 4852. L ink to W-2G. Must itemize to deduct gambling expenses, which cannot exceed winnings. Enter on TaxWise dividend statement. Enter on TaxWise interest statement. E nter on TaxWise dividend statement. Link to 1099-G worksheet. L ink to state tax refund worksheet. Report only if client itemized for 2010 & deducted state income tax. L ink from 1040 to Sch. C-EZ/C; then link from line 1 of C-EZ/C. Can deduct expenses; net income subject to SE tax. See the site manager. Always enter! Link to 1040 worksheet 1. S ee IRS Pub. 4012, yellow tab TaxWise Income or open a 1099-R, hit F1, go to bottom of the page. S ee the site manager if taxable amount is not on 1099-R. Not taxable for IL. L ink from 1040 to Sch. C-EZ/C; then link from line 1 of C-EZ/C to a scratch pad. Can deduct expenses; net income subject to SE tax.

1099-DIV 1099-INT 1099-DIV/1099-B 1099-G 1099-G 1099-MISC

Dividends Interest Capital gain distributions Unemployment State tax refund

Unearned Unearned Unearned Unearned Unearned

1040, line 9 1040, line 8 1040, line 13 1040, line 19 1040, line 10

Nonemployee compensation (box 7)

Earned

1040, line 12

1099-MISC SSA-1099 RRB-1099-R

Other income (box 3) Social security benefits Railroad retirement

Unearned Unearned Unearned

1040, line 21 1040, line 20 1040, lines 16 & 20

1099-R

Pension

Unearned

1040, line 16

None

Cash for work not on W-2 or 1099-MISC

Earned

1040, line 12

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CHILD TAX CREDIT & ADDITIONAL CHILD TAX CREDIT

Both credits: The maximum amountfor both credits combinedis $1,000/child.

CHILD & DEPENDENT CARE CREDIT

The credit is nonrefundable. If there is zero taxable income (form 1040, line 43) there is no reason to claim the credit. The qualifying child must be under age 13 or disabled at the time of the child

Credits based on the number of qualifying children, amount of income tax and the amount and type of income on the return.

care. In some cases, the cost of care for a disabled spouse or other dependent

The child/children must be a qualifying child who is under age 17 at the end of the tax year. There is no exception to the age requirement.

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

Specific to Child Tax Credit: The child tax credit is nonrefundable and appears on Form 1040, page 2, line 51. The child tax credit is applied to income tax after other nonrefundable credits have been used. Specific to Additional Child Tax Credit: The additional child tax credit is refundable and appears on Form 1040, page 2, line 65. When additional child tax credit is claimed, the Form 8812 must be filed with the tax return. A client generally receives the additional child tax credit when two tests are met: 1. The full child tax credit, $1,000 per child, is more than is needed to offset income tax. 2. At least one of the following is true: The client has earned income over $3,000. The client has three or more qualifying children.

ables the client to work. For married couples, both taxpayers generally must be working and file a joint return. The credit is claimed using Form 2441, Child and Dependent Care Expenses. The providers name, address and identifying number must be reported on Form 2441

TaxWise Hint: Mark the DC box next to the childs name on the Main Information Sheet.

Note: TaxWise automatically computes both credits and prepares Form 8812. Remember to complete the dependent section of the Main Information Sheet correctly. Do not override! TaxWise will do the rest.

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BENEFITS RELATED TO EDUCATION

WHOS LIKELY TO BENEFIT?

MAXIMUM ANNUAL BENEFIT

ANNUAL EXPENSES NEEDED FOR MAXIMUM BENEFIT

STUDENT REQUIREMENT

REQUIRED TO ATTEND AT LEAST HALF-TIME?

YEARS AVAILABLE

EXPENSES ELIGIBLE

HOW TO CLAIM?

American Opportunity Credit

Full time undergraduate in a degree program Taking just 1-2 classes or in graduate school

$1,000 refundable credit plus $1,500 nonrefundable credit $2,000 nonrefundable credit

$4,000

Must be pursuing undergraduate degree. Does not need to be in degree program if class improves job skills. Does not need to be pursuing a degree

Yes

Four years

Tuition, fees, books, course materials Tuition & fees only

Form 1040, lines 49 & 66, link to Form 8863 Form 1040, line 49, link to Form 8863

Lifetime Learning

$10,000

No

Unlimited

Tuition and Fees Deduction

Taking just 1-2 classes or in graduate school; zero taxable income Former student paying on loans

$4,000 adjustment to income

Student Loan Interest Deduction

$2,500 adjustment to income

$4,000 $2,500

No

Unlimited

Tuition and fees only

Form 1040, line 34, link to education worksheet

Loan used for undergraduate or graduate school, in a degree program.

Yes, at the time when the borrower was attending school N/A

Unlimited

Loans used to pay tuition, fees, books, course materials, room & board, transportation Books, supplies, equipment for classroom use

Form 1040, line 33, link to education worksheet

Educator Expense Adjustment

School teachers, grades K-12

$250 adjustment to income ($500 on joint return if both taxpayers are teachers) $500 nonrefundable IL state credit

$250 ($500 on joint return if both taxpayers are teachers)

N/A

Unlimited

Form 1040, line 23, link to education worksheet

Illinois Education Credit

Parents with children in private school, K-12

$2,250

Attending elementary or secondary school

N/A

Unlimited

Tuition and required book and lab fees in excess of $250

Form IL-1040, line 17, link to IL-Schedule ICR

* Caution! an education expense can only be used once, for one type of tax benefit. See your site manager if you are unsure how to determine the appropriate benefit to claim.

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// v O L U N T E E R A N S W E R G U I D E 2012

v O L U N T E E R A N S W E R G U I D E 2 0 1 2 // TAX PREPARATION INFORMATION

PRINTING

PRINTING THE CLIENT LETTER IN SPANISH

1. 2. In the TaxWise tree, click and highlight Letter[TCP Client - ENGLISH] Click Letter on the file menu Select Open Letter Select TCP Client - SPANISH.CL Click Open

1. Select

from the toolbar while the tax return is open in TaxWise.

3. 4. 5.

Note: You may also open the File menu and select Print Return. 2. Select the following print packets:

The Spanish version of the client letter will replace the English letter. For an e-file return Signature Pages File Copy

ITIN TAX RETURNS

An Individual Taxpayer Identification Number (ITIN) is a 9-digit number assigned by the IRS for taxpayers who do not qualify for an SSN. ITIN returns can be e-filed, just like any other return. Start the return using the taxpayers ITIN number instead of an SSN. If the spouse has an ITIN, enter that number on the Main Information 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-filed as well. No special procedures are needed.

For a paper return File Copy Federal Copy to be Mailed State Copy to be Mailed

A taxpayer who needs an ITIN should be referred to a CEP ITIN event, the IRS or a paid preparer to file an ITIN application. ITIN event information can be found on the CEP website at www. economicprogress.org/clients/ITIN. Taxpayers should be advised to bring all the information to file their tax return to the event. They should also bring a birth certificate and a valid picture ID to establish 1) their foreign status and 2) identity for any family member who needs an ITIN. A valid passport is sufficient to satisfy both requirements.

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NOTES & ADDITIONAL INFORMATION