VITA Return Volunteer Training 12/16/2017
Returning Volunteer Training – 12/16/2017
Practice Return Scenarios:
Valerie Sinclair pre-Return Training problem (Federal refund $4539, Oregon refund $969)
HINTS for Beatriz’s return:
- Education credits do not automatically carry over to the Oregon return (called a “Subtraction”) in TaxSlayer so they must be entered manually whenever education expenses are included on a Federal return.
- Where to manually enter education expenses on Oregon return: ‘Enter Myself’ -> Subtractions from Income -> Other Subtraction #1 -> Federal Education Credits -> ($ amount of education expenses not including books or other materials)
HINTS for Erik’s return:
- Reyna graduated in 2016, not 2017.
- All tax forms, though they may say 2016, are 2017 forms!
- When entering education expenses as an Oregon “Subtraction” please put expenses as separate subtractions for each person if more than one person on the return had them (i.e. Benita and Reyna).
- Education expenses that do not qualify for American Opportunity Credit: These expenses may be more beneficial with either the Lifetime Learning Credit (tuition also added as a Subtraction to Oregon’s return) or as a ‘Tuition and Fees Deduction’ Adjustment (tuition not additionally added onto Oregon return). We must do a comparison with our taxpayers to see which carries more benefit. We’re comparing total refund amount (Federal +/- Oregon) so before comparing you must first complete the entire return (adding tuition as “Subtraction” on Oregon return when it’s Lifetime Learning Credit being used) and then compare.
- For Benita’s tuition:
- Complete entire Federal return with Benita’s tuition ($120) with the Lifetime Learning Credit.
- Complete Oregon return while including Reyna’s qualifying education expenses (not including books or materials) as one “Other Subtraction” and Benita’s qualifying education expenses ($120) as a second “Other Subtraction”.
- Write down how much the Federal and State refund/balance due are (should be +$4,045/-$85).
- Go back into the Federal return and change Benita’s expenses from the Lifetime Learning Credit to the “Tuition and Fees Deduction”.
- Continue through to the Oregon return and remove Benita’s “Other Subtraction” (her tuition would not be included on Oregon’s return if it’s used on the Federal return as the “Tuition and Fees Deduction”.
- Save and compare Federal and State refund/balance due (should also be +$4,045/-$85).
- In this example it turns out it is the exact same using the Lifetime Learning Credit or the Tuition and Fees Deduction but this is not always the case. We must always take these steps to check!
- If you put that Benita was blind on the Main Information Page then their refunds would be
Power Point presentations: