Counselor Reference Manual - AARP CA2

1 AARP FOUNDATION TAX-AIDE CALIFORNIA Counselor Reference Manual (CRM) For TaxSlayer Online TAX YEAR 2017 The printed CRM can be ordered from the Franchise Tax Board The electronic CRM can be found at Tax-Aide for CA-2: Corrections? Comments? Suggestions? Send email to jebroughton (at) December 2, 2017 i TABLE OF CONTENTS GENERAL INFORMATION .. 1 RESOURCES .. 1 WHAT TAX-AIDE CAN AND CANNOT DO - SCOPE .. 2 ONLINE PROCEDURES .. 3 BROWSERS AND BROWSER SETTINGS ..3 LOGIN AT START OF THE DAY ..4 NAVIGATION WITHIN A RETURN ..5 ENTERING INFORMATION ..6 COMMUNICATING WITHIN TAXSLAYER ..8 INITIAL STEPS FOR A TAX RETURN.

2 9 INTERVIEWING THE CLIENT ..9 DETERMINING IF A RETURN SHOULD BE PREPARED ..10 ORGANIZING YOUR WORK ..11 STARTING A NEW RETURN ..12 OPENING AN EXISTING RETURN ..14 BASIC INFORMATION .. 14 FILING STATUS ..14 PERSONAL INFORMATION ..16 DEPENDENTS AND QUALIFYING CHILDREN ..19 OTHER INFORMATION ON PAGE 1 OF THE INTAKE/INTERVIEW SHEET ..20 QUICK FILE .. 21 FEDERAL SECTION - INCOME .. 22 LINE 7 - WAGES, SALARIES, AND TIPS ..22 LINE 8 - TAXABLE INTEREST ..30 LINE 9 - DIVIDENDS ..33 LINE 10 - TAXABLE STATE INCOME TAX REFUND ..34 LINE 11 - ALIMONY RECEIVED ..34 LINE 12 - BUSINESS INCOME ..35 LINE 13 - CAPITAL GAIN OR LOSS ..39 LINE 14 - OTHER GAINS OR LOSSES (OUT-OF-SCOPE).

3 43 LINE 15/16 - PENSIONS AND ANNUITY INCOME & IRA DISTRIBUTIONS ..43 LINE 17 - RENTAL REAL ESTATE AND ROYALTIES ..51 LINE 18 - FARM INCOME (OUT-OF-SCOPE) ..53 LINE 19 - UNEMPLOYMENT COMPENSATION ..53 LINE 20 - SOCIAL SECURITY AND RAILROAD RETIREMENT BENEFITS ..53 LINE 21 - OTHER INCOME ..55 ADJUSTMENTS TO INCOME .. 59 LINE 23 - EDUCATOR EXPENSES ..59 LINE 24 - CERTAIN BUSINESS EXPENSES (OUT-OF-SCOPE) ..59 LINE 25 - HEALTH SAVINGS ACCOUNT ..59 LINE 26 - MOVING EXPENSES (OUT-OF-SCOPE) ..59 LINE 27 - DEDUCTIBLE PART OF SELF EMPLOYMENT TAX ..60 LINE 28 - SELF-EMPLOYED SEP, SIMPLE PLANS (OUT-OF-SCOPE)..60 December 2, 2017 ii LINE 29 - SELF-EMPLOYED HEALTH INSURANCE (OUT-OF-SCOPE).

4 60 LINE 30 - PENALTY ON EARLY WITHDRAWAL OF SAVINGS ..60 LINE 31 - ALIMONY PAID ..60 LINE 32 - IRA DEDUCTION ..60 LINE 33 - STUDENT LOAN INTEREST LINE 34 - TUITION AND FEES DEDUCTION ..61 LINE 35 - DOMESTIC PRODUCTION ACTIVITIES (OUT-OF-SCOPE) ..62 LINE 36 WRITE-IN ADJUSTMENTS ..62 TAXABLE INCOME AND TAX CALCULATION .. 62 LINE 40 - DEDUCTIONS ..62 LINE 44 - TAX ..72 LINE 45 - ALTERNATIVE MINIMUM TAX (OUT-OF SCOPE) ..72 LINE 46 - EXCESS ADVANCE PREMIUM TAX CREDIT REPAYMENT ..72 NON-REFUNDABLE CREDITS .. 74 LINE 48 - FOREIGN TAX CREDIT ..75 LINE 49 - CREDIT FOR CHILD AND DEPENDENT CARE EXPENSES ..75 LINE 50 - EDUCATION CREDITS.

5 77 LINE 51 - RETIREMENT SAVINGS CONTRIBUTION CREDIT ..79 LINE 52 - CHILD TAX CREDIT ..80 LINE 53 - RESIDENTIAL ENERGY CREDITS ..80 LINE 54 - OTHER CREDITS ..81 OTHER TAXES .. 82 LINE 57 - SELF-EMPLOYMENT TAX ..82 LINE 58 - UNREPORTED SOCIAL SECURITY AND MEDICARE TAX ..82 LINE 59 - ADDITIONAL TAX ON IRAS, OTHER QUALIFIED LINE 60A - HOUSEHOLD EMPLOYMENT TAXES (OUT-OF-SCOPE) ..84 LINE 60B - FIRST-TIME HOMEBUYER CREDIT REPAYMENT, FORM 5405 ..84 LINE 61 - HEALTH CARE: INDIVIDUAL RESPONSIBILITY ..85 LINE 62 - OTHER TAXES ..88 PAYMENTS AND REFUNDABLE CREDITS .. 88 LINE 64 - FEDERAL INCOME TAX WITHHELD ..88 LINE 65 - 2017 ESTIMATED TAX PAYMENTS.

6 88 LINE 66 - EARNED INCOME CREDIT ..88 LINE 67 - ADDITIONAL CHILD TAX CREDIT ..89 LINE 68 - AMERICAN OPPORTUNITY CREDIT ..89 LINE 69 - NET PREMIUM TAX CREDIT ..89 LINE 70 - AMOUNT PAID WITH REQUEST FOR EXTENSION TO FILE ..89 LINE 71 - EXCESS SOCIAL SECURITY ..90 LINE 72 - FEDERAL TAX ON FUELS, FORM 4136 (OUT-OF-SCOPE) ..90 LINE 73 - CREDITS 2439 (OUT-OF-SCOPE) ..90 STATE SECTION AND CA ADJUSTMENTS & DIFFERENCES .. 90 BASIC INFORMATION ..91 ADJUSTMENTS AND DIFFERENCES ..91 INCOME EXCLUDIBLE FOR CA ..92 INCOME INCLUDIBLE FOR CA ..93 FEDERAL ADJUSTMENTS NOT RECOGNIZED BY CA ..94 ITEMIZED DEDUCTIONS TREATED DIFFERENTLY BY CA.

7 94 HEALTH SAVINGS ACCOUNTS IN December 2, 2017 iii CA-ONLY CREDITS ..95 CA USE TAX ..97 CA-ONLY VOLUNTARY CONTRIBUTIONS ..97 STATE TAX WITHHELD ..98 STATE ESTIMATED TAX PAYMENTS ..98 BALANCE DUE .. 98 UNDERPAYMENT PENALTIES ..98 DIRECT DEBIT ..99 DIRECT PAY ..99 REFUND DUE .. 99 DIRECT DEPOSIT ..99 APPLICATION OF OVERPAYMENTS TO NEXT YEAR S TAX RETURN ..100 INJURED SPOUSE CLAIM ..100 ESTIMATED TAX PAYMENTS FOR NEXT YEAR .. 100 FEDERAL ESTIMATED TAX PAYMENTS ..100 CA ESTIMATED TAX PAYMENTS (CA FORM 540-ES) ..101 E-FILE SECTION .. 101 FINAL STEPS IN TAX RETURN PREPARATION .. 106 EXITING A RETURN BEFORE COMPLETION.

8 106 PRE-QUALITY REVIEW ..106 QUALITY REVIEW RETURNS WITH TAXPAYER ..108 PRINTING RETURNS ..108 E-FILING: SIGNATURES ..109 PAPER RETURNS ..110 SUBMITTING E-FILES ..111 UNABLE TO PAY/LATE FILING .. 112 UNABLE TO PAY - FEDERAL ..112 UNABLE TO PAY - CALIFORNIA ..113 LATE FILING ..113 OTHER RETURNS .. 114 PRIOR YEAR RETURNS ..114 AMENDED REQUEST FOR EXTENSION OF TIME TO FILE .. 117 END-OF-SHIFT .. 118 SITE LOGS .. 119 INDIVIDUAL TAXPAYER IDENTIFICATION NUMBER (ITIN) .. 119 GLOSSARY .. 122 INDEX .. 123 CALIFORNIA INCOME TAX INTERVIEW WORKSHEET .. 128 December 2, 2017 ii Where to Mail Returns and Payments What Internal Revenue Service CA Franchise Tax Board Electronic filing with balance due (mail the payment and payment voucher ONLY) Internal Revenue Service Box 7704 San Francisco, CA 94120-7704 (Form 10f40-V) Franchise Tax Board Box 942867 Sacramento, CA 94267-0008 (Form 3582) Paper return with balance due (mail the signed return and the payment) Internal Revenue Service Box 7704 San Francisco, CA 94120-7704 (1040 with 1040-V and payment) Franchise Tax Board Box 942867 Sacramento, CA 94267-0001 (CA Form 540 with payment)

9 Paper return with nothing due or refund (mail the signed return) Department of the Treasury Internal Revenue Service Fresno, CA 93888-0002 (1040) Franchise Tax Board Box 942840 Sacramento, CA 94240-0001 (CA Form 540) Amended return with balance due (paper filing; mail the signed return and payment) [If in response to a letter from the IRS or FTB, see below] Department of the Treasury Internal Revenue Service Fresno, CA 93888-0422 (1040X with payment) Franchise Tax Board Box 942867 Sacramento, CA 94267-0001 (CA Form 540X with payment) Amended return with nothing due or refund (paper filing; mail the signed return) [If in response to a letter from the IRS or FTB, see below] Department of the Treasury Internal Revenue Service Fresno, CA 93888-0422 (1040X) Franchise Tax Board Box 942840 Sacramento, CA 94240-0001 (CA Form 540X) Estimated payments (mail the payment and voucher) Internal Revenue Service Box 510000 San Francisco, CA 94151-5100 (Form 1040ES) Franchise Tax Board Box 942867 Sacramento, CA 94267-0008 (Form CA Form 540ES) Automatic six month extension no payment (mail the form) Department of the Treasury Internal Revenue Service Fresno, CA 93888-0045 (Form 4868)

10 Nothing to file Automatic six month extension with payment (mail the form and payment) Internal Revenue Service Box 7122 San Francisco, CA 94120-7122 (Form 4868 with payment) Franchise Tax Board Box 942867 Sacramento, CA 94267-0008 (Form CA 3519 with payment) Response to a letter from the IRS or FTB Mail to address specified in letter with 1040X if needed, any needed documentation, and payment as needed (if possible) Mail to address specified in letter with 540X if needed, any needed documentation, and payment as needed (if possible) General Information 1 December 2, 2017 GENERAL INFORMATION Volunteering with AARP Foundation Tax-Aide: direct interested persons to , 888-775-2277, or put them in contact with your District Coordinator (DC) or Local Coordinator (LC) Those interested in other AARP programs, such as Reverse Mortgages, Senior Community Service, and Money Management, should be directed to ; they can also call the above phone number.