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2011 Volunteer Tax Preparation. NJ Division of Taxation www.njtaxation.org. Important Contact Information. Regional Information Centers Customer Service Center 609/292-6400 Division of Revenue E-File Unit 609/633-1132 Training & Outreach Outreach.tax@treas.state.nj.us.

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2011 volunteer tax preparation

2011Volunteer Tax Preparation

NJ Division of Taxation


Important contact information
Important Contact Information

Regional Information Centers

Customer Service Center


Division of Revenue E-File Unit


Training & Outreach



New for 2011
New for 2011

Emancipation Day!!!

Returns due April 17th, 2012

Charitable Contributions

One new charity

New Jersey Lung Cancer Research Fund


Roth IRA Conversions done in 2010

2011/2012 Tax Reporting

Form NJ-1040-H

Property Tax Credit

No Tenant Rebate Application

Suspended by the State Budget

Form 1099-G no longer mailed

Important processing information
Important Processing Information

Do not staple, clip or otherwise attach pages together

Place only 1 return for each envelope

You may not report a loss on Form NJ-1040

Leave unused lines ‘Blank’

Form nj 1040

Form NJ-1040

Identifying Information

Page 1

Civil union domestic partner
Civil Union / Domestic Partner

Civil Union Couples – Filing Status

“Married” under NJ Law

IRS does not recognize CU’s

Domestic Partner – Exemption

Not Married

Line 6 Exemption may apply

If partner does not file NJ-1040

Line 11 dependents attending college
Line 11: Dependents Attending College

Must be a dependent

Line 9 or 10

Full-time College Student

Defined by Institution

Under age 22

For Entire Tax Year

Form nj 10401

Form NJ-1040

Reportable Income

Page 2

Tax exempt income
Tax-Exempt Income

Social Security

Unemployment Compensation

Debt Cancellation – Form 1099-C

Military Pensions

Refer to page 21

Wages line 14
Wages (Line 14)

Use W-2 Box 16, ‘State Wages’

State wages often differ from Federal wages (Box 1)

All W-2s received must be included with the NJ-1040

Tax exempt interest line 15b
Tax-Exempt Interest (Line 15b)

Obligations of the State of New Jersey and/or any of its political subdivisions

Direct Federal Obligations

Pub GIT-5, Exempt Obligations

Refer to page 23

Must enclose an itemized schedule if line 15b is over $10,000

Net profits from business line 17
Net Profits from Business (Line 17)

Federal Schedule C

Use Federal Expenses and Deduction

100% Meal/Entertainment Deduction

Line 17 ‘Blank’ if Net Loss

See page 23, NJ Instruction Booklet

Retirement plans
Retirement Plans



fully taxable

Three year rule general rule
Three-Year Rule / General Rule

NJ accounting methods

No ‘Simplified’ Method

Client needs Contribution Records

Often varies from Federal Treatment

Three year rule
Three-Year Rule

If employee contributions recovered within 36 months of date of first pension payment

Pension income is not reported until contributions are recovered

IRS no longer allows three year rule

General rule
General Rule

Percentage is used based on proportionate share of Contributions to Total Value of the Pension

This is applied each year to the Pension amount received

Use Worksheet A, pg 24, to determine which pension method to use

2010 conversions to roth
2010 Conversions to Roth

  • NJ Following the IRS

    • Deferred until 2011-2012

  • NJ/Fed reporting must be the same

  • Ira withdrawals
    IRA Withdrawals

    Use Worksheet C, Page 26

    Client Record Keeping

    IRA Contributions

    Prior Year Worksheet C

    Roth Distributions

    Exempt if ‘Qualified’ – page 27

    Taxable pension line 19
    Taxable Pension (Line 19)

    Line 19 is for the total of:

    Taxable Pensions (after reduction by Three-year or General Rule)

    Taxable Annuities

    Taxable IRAs

    Gambling winnings line 23
    Gambling Winnings (Line 23)

    Include Casino and Track Betting

    Include NJ Lottery Winnings

    Only with prizes exceeding $10,000

    Substantiated Losses

    Can be used to Net total winnings

    Record keeping losses
    Record Keeping - Losses

    Substantiated through:

    Daily log


    Canceled check

    Losing race track pari-mutuel tickets

    Losing Lottery Tickets

    Pension exclusion line 27a
    Pension Exclusion (Line 27a)


    Age 62/older or Disabled

    Total income of $100,000 or less

    Amounts Based on Filing Status

    $20,000 – MFJ/HOH/Widow

    $15,000 – Single

    $10,000 - MFS

    Retirement exclusion line 27b
    Retirement Exclusion (Line 27b)

    Taxpayer may deduct unused Pension

    Exclusion from Line 27a if:

    Line 14 ___

    Line 17 ___

    Line 20 ___

    Line 21 ___

    Total less than $3,000

    Earned Income

    Gross income line 28
    Gross Income (Line 28)

    No Filing Required if:

    $10,000 or less


    Married/CU - Filing Separate

    $20,000 or less

    Married/CU Filing Joint

    Head of Household

    Qualifying widower

    Medical expenses line 30
    Medical Expenses (Line 30)

    Unreimbursed medical expenses

    Include MSA Contributions (Archer)

    Expenses in excess of 2% of line 28 Gross Income

    Worksheet E, Page 31

    Property tax deduction credit
    Property Tax Deduction/Credit

    Enter total property taxes paid (or 18% rent) on line 36a

    Include Homestead Benefit received as a credit

    PTR applicants – use base year amount

    Residency Status – Line 36b


    Property tax deduction credit1
    Property Tax Deduction/Credit

    Worksheet F

    determines the greater benefit

    Deduction Limited to $10,000

    $5,000 MFS

    Enter Property Taxes Paid on Line 36cor a flat $50 credit on Line 48

    Tax line 38
    Tax (Line 38)

    Show NJ Tax amount based on taxable income

    Tax Tables (Pg 53)

    Tax Rates (Pg 62)

    Form nj 10402

    Form NJ-1040

    Calculating Tax and Payments

    Page 3

    Credit for taxes paid line 40
    Credit for Taxes Paid (Line 40)

    Used for NJ Residents who have income subject to tax out of the state

    Schedule A must be completed

    Note: Income must be reported on the NJ-1040

    Use tax line 44
    Use Tax (Line 44)

    Purchases out of state

    No NJ Sales Tax

    Estimated Use Tax Chart (pg 39)

    Absent of Purchase Records

    Enter 0.00 if no Use Tax is due

    Nj income tax withheld line 47
    NJ Income Tax Withheld (Line 47)

    Form W-2, Box 17 (State Income Tax Withheld)

    Form 1099-R (Pensions, etc)

    Include amounts from all W-2s & 1099s received

    Note: Be sure W-2, Box 15 Shows ‘NJ’

    Earned income tax credit line 50
    Earned Income Tax Credit (Line 50)


    All NJ Residents who qualify for Federal EITC are eligible to apply – subject to review

    Calculated Amount

    20% of Federal EIC amount

    Excess ui di fli lines 51 53
    Excess UI/DI/FLI (Lines 51 - 53)

    For people with:

    Multiple employers

    Multiple W-2s

    With excess UI/DI/FLI contributions

    Must complete and include Form NJ-2450 with NJ-1040

    Underpaid or overpaid
    Underpaid or Overpaid

    Compare Total Payments (Line 54) to Total Tax (Line 46)

    If Line 54 is greater than line 46, the difference is an overpayment

    If Line 54 is less than line 46, the difference is due to the state

    Refund amount line 65
    Refund Amount (Line 65)

    Overpayments can be:

    Left as a credit for next year;

    Donated (all or in part) to various charitable designations; or

    Refunded to the Taxpayer

    Be sure to include requested refund amount on Line 65

    Part year residents
    Part-Year Residents

    Resident only Part of the Tax Year

    Complete ‘Residency Status’

    Page 1, Form NJ-1040

    Allocate Income

    Just NJ Residency Period

    Pro-Rate Exemptions and Deductions

    by Number of Months in NJ

    Property tax relief programs
    Property Tax Relief Programs

    Form NJ-1040-H

    Certain filers only

    Homestead Benefit

    Only Homeowners

    Property Tax Reimbursement

    Homeowners/Mobile Home Owners

    Form nj 1040 h
    Form NJ-1040-H

    Property Tax Credit ($50)

    Age 65/Ovr or Disabled

    No NJ Income Tax Return Filed

    Under Filing Threshold

    Did not own Residence on 10/1/11

    Homestead benefit
    Homestead Benefit

    Owned/Occupied Residence

    On 10/1/11

    Gross Income Under – regardless of filing status

    $150,000 – 65/Ovr or Disabled

    $75,000 – Everyone else

    Paid as Direct Property Tax Credit

    No Tenant Rebate Application

    Suspended by the State Budget

    Ptr eligibility
    PTR - Eligibility

    Must be Age 65/ovr or Disabled by 12/31/2010

    NJ Resident for at least 10yrs

    Owned and lived in the home for at least 3 years

    Have fully paid property taxes due

    by June 1st of following year

    Property tax reimbursement
    Property Tax Reimbursement

    Income Eligibility Limits


    Single/Married $80,000


    Single/Married $80,000

    Ptr income limits
    PTR – Income Limits

    Virtually all gross income is included for PTR eligibility

    Social Security


    Military Pension

    NJ Lottery Winnings

    This will often vary from the income tax form

    Ptr first time filers
    PTR – First Time Filers

    Form PTR-1 – available online

    Establishes 2010 and 2011 Eligibility

    Reserves Base Year at 2010 Level

    Difference of 2011 & 2010 Taxes

    Proof of Property Taxes must be included with all PTR applications

    Ptr 2 nd and later years
    PTR – 2nd and Later Years

    File Form PTR-2

    Comes Pre-Printed with Base Year

    Verifies 2011 Eligibility

    Difference of 2011 and Base Year

    Proof of Property Taxes must be included with all PTR applications

    Budgetary approval
    Budgetary Approval

    All Property Tax Relief Benefits are Subject to Change

    NJ FY 2013 Budget

    Passed by June 30th, 2012

    Property tax relief assistance
    Property Tax Relief Assistance…

    Homestead Benefit


    Property Tax Reimbursement


    NJ Tax Hotline