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2011 TRAINING PROGRAM. Emphasis on Self-training using the internet New Training web site – TaxPrep4Free.org Use of Mentors and Work Shops Familiarization Training – Principally for New Volunteers - How to Use Tax Wise - 8 Problems Federal and NJ - 2010 Tax Law Modules

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2011 training program
2011 TRAINING PROGRAM
  • Emphasis on Self-training using the internet
  • New Training web site – TaxPrep4Free.org
  • Use of Mentors and Work Shops
  • Familiarization Training – Principally for New Volunteers

- How to Use Tax Wise

- 8 Problems Federal and NJ

- 2010 Tax Law Modules

Note – 2011 Tax Law Modules – In Process

- Available on NJ Website Mid/Late Dec

january 2012 training topics
JANUARY, 2012 TRAINING TOPICS
  • What’s New, 2011 Tax Law and Tax Wise
  • Administrative topics
  • NJ Proficiency Problem – Review of Completed Problem
  • NJ Division of Taxation & IRS Presentations
  • Site Assignments
certification requirements
CERTIFICATION REQUIREMENTS

(1) Four 4491-W Problems

Complete and Review by Assigned Mentor

by end of December

New Volunteers

– 2010 Problems with Refund Monitors

Moore, Baylor, Fleming, Sterling

TaxPrep4Free.org  Training  Proficiency

certification requirements4
CERTIFICATION REQUIREMENTS

Returning Volunteers

2011 Problems (from 2011 Pub 4491-W):

Moore, Fleming, Sterling & Kent

Refund monitors for Moore, Fleming, Sterling

TaxPrep4Free.org  Training  What’s New for 2011 

TY 2011 4491-W Refund Monitors

Mentors will be assigned at this meeting

certification requirements cont d
CERTIFICATION REQUIREMENTS (Cont’d)
  • 2011 IRS Test - Complete by Jan 12
  • Includes Standards of Conduct test (New) for All Volunteers
  • Counselors must complete Basic, Intermediate and Advanced tests
  • Complete the test questions in Pub 6744 (some require preparation of a tax return)
  • Submit your answers
    • Enter your answers on-line (preferred) which will give you immediate feedback on your score. [On-line questions may be worded differently than Pub 6744]. Print your certificates.
    • Or, complete the answer sheet in Pub 6744 and give to Joe McFadden
certification requirements cont d6
CERTIFICATION REQUIREMENTS (Cont’d)
  • NJ Proficiency Exercise

Problem Available on NJ Web Site by End of Dec.

Complete Using NJ 2011 Software Available Early Jan.

Due Date TBD

To Be Reviewed/Discussed at Jan Meeting and/or Jan Work Shops

new topics on irs test
New Topics on IRS Test
  • Sale of securities (new form required)
  • Lump sum Social Security payments
  • Repayment of first-time homebuyers credit
  • Penalty on early withdrawal from retirement plans
sale of securities 1099b
SALE OF SECURITIES – 1099B
  • Revised 1099-B in 2011
  • Brokers Must Report Cost, Date ofAcquisition, Long or Short Term for Covered Securities OR Indicate if Security is Uncovered Security
  • The only Covered Security for 2011 is Stock Acquired in 2011 (But Not Stock Acquired as Part of a DRIP)
    • But Brokers May Report Cost, etc for Sales of Stock Acquired before 2011 If Info is Available
  • Reporting of Cost, etc. for Uncovered Securities, Mutual Funds, Bonds, etc., Will Be Phased In Over Next 2 Years
capital gains worksheet10
CAPITAL GAINS WORKSHEET
  • The worksheet will populate Form 8949 Pg 1 (short term) and Pg 2 (long term):

(A) Cost Basis Shown on 1099-B (Box 3)

(B) Cost Basis Not Shown on 1099-B

(C) No 1099-B Rec’d For Sale (Rare)

  • Sch D is populated with the totals
adjustments to gain loss
ADJUSTMENTS TO GAIN/LOSS
  • New Worksheet Also Provides For Adjusting Reported Gain/Loss On Sale
  • Column (b) - Insert Code to Indicate Type of Adj. Such As Exclude Gain on Home Sale or Incorrect 1099-B
  • Column (g) – Amount of Adj. to Reported Gain/Loss
  • NOTE – Codes for Types of Adj. are in Pub 4012, Tab 2, page 2-16
lump sum social security payments
LUMP SUM SOCIAL SECURITY PAYMENTS
  • 2011 portion of lump sum goes on the bottom part of Social Security worksheet:
lump sum social security payments continued
LUMP SUM SOCIAL SECURITY PAYMENTS (continued)
  • For the portions of lump sum from prior years, link to Lump-Sum Worksheet from “Amounts taxable from previous years”
  • See example in
  • TaxPrep4Free  Training  What’s New for 2011  Lump Sum Payments (in right margin)
repayment of first time homebuyers credit
REPAYMENT OF FIRST-TIME HOMEBUYERS CREDIT
  • Taxpayers who received First Time Homebuyers Credit in 2008 ($7,500) must repay Over 15 Years beginning in 2010.|

- Another payment is due in 2011

  • Use Form 5405 Page 2, Part IV as shown on the next page
  • Sale of home is out-of-scope
penalty on early withdrawal from retirement plans
PENALTY ON EARLY WITHDRAWAL FROM RETIREMENT PLANS
  • Early Withdrawal From Qualified Retirement Plans Results in 10% Penalty (Code 1 in Box 7 of 1099-R)
  • If Exception Applies, Penalty Can Be Eliminated/Reduced on Form 5329, Part 1
  • Record Amount of Exception and Related Code on Line 2 of Form 5329
common exceptions to penalty for early distributions
COMMON EXCEPTIONS TO PENALTY FOR EARLY DISTRIBUTIONS
  • For Higher Education Expenses
  • Due to Total and Permanent Disability
  • For Unreimbursed Medical Expenses In Excess of 7.5% of AGI
  • To Unemployed Persons for Health Insurance Premiums
  • For Purchase of First Home - Up to $10,000 of Penalty
  • Error on 1099-R
2011 special topics trained volunteers only
2011 SPECIAL TOPICS - TRAINED VOLUNTEERS ONLY
  • Form 1099-Q, Qualified Education Distributions
  • Form 8606, Non-Deductible IRA Contributions/Distributions
  • Form 5405, Repayment of 2008 1st Time Homebuyers Credit
  • Form 5329 Part 1, Elimination of 10% Penalty On Early Withdrawal From Retirement Plans
  • Lump Sum Social Security payments
  • Part Year NJ Resident Tax Return
  • Foreclosure on Principal Residence and Cancellation of Debt (COD) - Must Pass Special IRS Test
  • Health Savings Accounts (HSA) – Must Pass Special IRS Test